The tech-heavy Nasdaq led sharp losses among major US stock indexes on Monday, dropping over 3% to a near six-month low, on fears that US President Donald Trump’s tariff policies would spark an economic slowdown. The benchmark S& has fallen over 8% from its Feb high.
Financial markets have been volatile in recent weeks as rising trade tensions and signs of slowing US economic growth weighed on consumer confidence and business activity. Richly valued US tech stocks have borne the brunt of the recent selloff on Wall Street.
“The Nasdaq has been risk-off all year long … that’s just the unfortunate combination of very high valuations, which is where we started the year, and increased uncertainty in general,” said Chris Zaccarelli, chief investment officer.
The S& is poised to close below its 200-day moving average for the first time since Nov 2023. A Reuters poll showed 91% of economists see higher recession risks due to Trump’s shifting trade policies. HSBC also downgraded US stocks.
Trump declined Sunday to rule out the possibility that the US might enter a recession this year. “I hate to predict things like that,” he told a Fox News interviewer when asked directly about a possible recession in 2025, reported AFP.