10 March 2025, 22:19
Stock Exchange on Wall Street on Monday, March 10, 2025 in New York City. Stocks dropped after President Donald Trump didn't rule out a recession with U.S. tariffs being implemented.
Stock Exchange on Wall Street on Monday, March 10, 2025 in New York City. Stocks dropped after President Donald Trump didn't rule out a recession with U.S. tariffs being implemented. Picture: Alamy
By Jacob Paul
US shares plunged again on Monday after President Donald Trump refused to rule out the possibility of a recession or higher inflation this year as his volatile trade policies continue to send shockwaves through the American economy.
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Tesla shares plummeted by at least 15% to $222 - which means it has lost more than half its value since its peak at $479.86 on 17 December.
Billionaire boss Elon Musk insisted on X that "it will be fine long-term".
The carmaker’s shares surged after Trump’s election win in November, but have now since tumbled with the firm losing over 50 percent of their value since its December high.
Meanwhile, tech giant Nasdaq Composite close down over 4% on Monday.
Heavy losses were seen across other markets, although bak and tech stocks were the hardest hit.
Palantir fell 7.6% while and Nvidia lost 5.1 per cent.
Morgan Stanley, Citigroup and Goldman Sachs all dipped more than 4%.
The S&P 500 plunged about 2.7% - its largest daily percentage dip since 18 December.
It comes after Trump said his country is going through a ‘period of transition’ and that his economic police will ‘take a little time’.
The comments caused the US stock market to take a sharp plunge earlier on Monday, with Wall Street’s main indexes the Dow Jones, the S&P 500, and Nasdaq all dropping into the red.
Last week, the S&P 500 registered its worst week since September, sliding downwards by 3.1%, as a result of Trump’s volatile trade tariffs policy.
Trump has now refused to rule out the possibility of the US economy sliding into a recession and rising inflation as a result of his tariff flip-flopping.
Read more:Trump suspends some tariffs on imports from Canada after agreeing similar deal for Mexico amid fears for economy
The president responded “I hate to predict things like that,” when asked if he was expecting a recession in an interview with Fox News.
“There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us,” Trump said.
A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell on March 5, 2025, in New York City.
A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell on March 5, 2025, in New York City. Picture: Getty
When asked if his tariffs could cause a rise in inflation, he said: “You may get it. In the meantime, guess what? Interest rates are down.”
After imposing and then quickly pausing 25% tariffs on imports from Mexico and Canada, markets were sent into a downward spiral over concerns of a trade war.
And when the US hit China with 20% tariffs, the Asian economic giant said they were ‘ready for war’ with the US.
Tomasz Wieladek, an economist at US asset manager T Rowe Price, told the Financial Times: “It is getting ugly.
“There is the realisation that Trump doesn’t care about the real economy in the short term. Markets are now beginning to take a trade war future seriously… and beginning to realise how painful this will be."
Read more:China says it is ‘ready for war’ with America as Trump tariffs come into effect
In a direct threat to Trump, China’s representatives in America said: “If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.”
Less than a month after returning to the White House on January 20, Trump slapped 10% duties on all Chinese imports.
Stock market falls as Trump's tariffs spark retaliation
China responded with 15% duties on coal and liquefied natural gas products, and a 10% tariff on crude oil, agricultural machinery and large-engine cars imported from the US.
Despite the uncertainty caused by the tariff policy, the US president said his plans for broader ‘reciprocal’ tariffs will go into effect on April 2, raising them to match what other countries assess - meaning the trade war could be continuing for a while longer.
Last week, the Atlanta Federal Reserve warned of an economic contraction in the first quarter of the year, further fueling the stock market decline.
In his interview on Sunday, Trump seemed to acknowledge that his plans could affect US growth, but would ultimately be "great for us,” he said.
Trump's tariffs have stirred up bad blood among allies who see his aggression on trade as misguided and antagonistic.
The trade war is not necessarily a brief skirmish as the White House maintains that even harsher taxes on imports are coming in April, even as businesses and consumers worry that rising costs will crush economic growth, worsen inflation and result in lay-offs.
Still, the administration is grappling with the fallout of tariffs that could create serious blowback for his political mandate to lower prices.
Trump has acknowledged that his tariffs could cause some financial pain, yet he has repeatedly said the tariffs will lead to more domestic investment and factory work.