US stocks fall after Donald Trump refuses to rule out possibility of recession

US stocks witnessed a decline in the early trading session on Monday, a day after President Donald Trump refused to rule out a potential recession.

In an interview that aired on Sunday, he had forecast an impending "period of transition" for the American economy.

Dow Jones, S&P decline

On Monday, the Dow Jones Industrial Average dropped by 515 points, as per ABC News. Meanwhile, the S&P 500 fell by 1.4 percent, with a 1.95 percent drop also recorded by the Nasdaq Composite index. Elon Musk-owned Tesla also plummeted nearly 6 percent.


Amid the uncertainty caused by Trump's tariff policy, stocks have witnessed a constant decline so far this month. Last week, the S&P fell by 3.1 percent, as per CNN. The plummet caused the index to register its worst week since September.

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Donald Trump's prediction on recession

Appearing on Fox News' "Sunday Morning Futures", Trump had been asked if he saw an eventual recession in 2025. Replying to the question, he had said, "I hate to predict things like that. There is a period of transition because what we’re doing is very big," according to CNN.

Donald Trump's tariff policy

Last week, the Trump administration imposed a 25 per cent levy on goods imported from Mexico and Canada. The tariffs were imposed on Tuesday, weeks after they were originally supposed to come into effect. However, a day later, the White House announced a one-month exemption for vehicles imported from Mexico and Canada under the USMCA free trade agreement.

On Thursday, the Trump administration decided to temporarily suspend tariffs on imports from the two countries covered by the framework. The US has already doubled the tariff hike that was imposed on Chinese imports after his inauguration. The levy on Chinese goods now stands at 20 percent. Trump has also said that import duties may continue to "go up" with time.

What experts are saying about impact of tariff buzz

David Bahnsen, chief investment officer at the Bahnsen Group, highlighted that the uncertainty around tariffs is worse than the actual implementation of the taxes, CNN reported. "The tariff talk, reversal, speculation, and chaos only fosters uncertainty," he said in a note on Monday. Bahnsen also opined that the White House is itself unsure about the impact that the tariffs will generate.

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FAQs

How US stocks have been impacted amid the uncertainty over Donald Trump's tariff policy?
US stocks have fallen constantly so far this month as the uncertainty surrounding Trump's tariff policy continues to persist.

What is the latest move on tariffs by Donald Trump?
On Thursday, the Trump administration decided to temporarily suspend tariffs on goods imported from Mexico and Canada under the USMCA framework.