US stocks drop following Trump’s refusal to rule out recession

Stocks in the United States fell sharply in early on Monday, with major indexes suffering broad losses a day after President Donald Trump decided not to rule out the possibility of a recession.

The Dow Jones Industrial Average dropped 515 points, or 1.2%, while the S&P 500 declined by 1.4%. The tech-heavy Nasdaq experienced an even steeper drop, plunging nearly 2%.

Among individual stocks, Tesla fell nearly 6%, while United Airlines and Delta each lost more than 5.5%.

The decline extended a downward trend from the previous week, fueled by uncertainty surrounding Trump’s tariffs on Canada, Mexico, and China, some of which were later withdrawn or delayed. The S&P 500 had already recorded its worst week since September.

When asked about the possibility of a recession in an interview broadcast on Sunday, Trump suggested that recent tariffs could result in a “period of transition.”

“I hate to predict things like that,” Trump told Fox News in an interview taped on Thursday. “It takes a little time, but I think it should be great for us.”

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Later on Sunday, when questioned about his hesitation to rule out a recession, Trump responded, “I tell you what, of course you hesitate. Who knows?”

Since Trump’s inauguration, the Dow Jones Industrial Average has fallen 2.5%. The S&P 500 has dropped by 5%, and the Nasdaq has declined 9%.

The market downturn has coincided with weaker-than-expected economic data. A jobs report released on Friday showed that U.S. employers added 151,000 jobs last month, falling short of the projected 170,000.

Additionally, consumer confidence saw its largest monthly drop since August 2021, according to the nonpartisan Conference Board. The percentage of consumers who anticipate a recession within the next year climbed to a nine-month high.

Despite this, some measures of consumer sentiment showed improvement. Assessments of current business conditions rose, and purchasing plans for homes continued a months-long recovery.

Mortgage rates have also declined for seven consecutive weeks, according to Freddie Mac. The average rate for a 30-year fixed mortgage now stands at 6.63%, the lowest level since December.

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