US Stocks Drop Sharply as Fears of Economic Slowdown Grow
(Adapted from a BBC report)
US stock markets fell sharply on Monday as fears grew about a possible economic slowdown. The drop came after President Donald Trump suggested the US economy is in a “period of transition” due to his tariffs, raising concerns about a potential recession.
According to the BBC, the Nasdaq saw its biggest single-day loss since 2022, dropping 4%, while the S&P 500 fell 2.7% and the Dow Jones dropped 2.1%.
Tech stocks were hit the hardest, with Tesla shares falling 15.4% and chipmaker Nvidia dropping over 5%. Other major companies like Meta, Amazon, and Alphabet also saw significant losses.
The BBC reports that investors are worried Trump’s tariffs—taxes on imported goods—could lead to higher prices and slower economic growth.
In a Fox News interview, Trump acknowledged concerns about the economy but said his policies are bringing wealth back to America. However, his comments did little to calm the markets. A White House official later tried to ease fears, saying business leaders are responding positively to Trump’s agenda, including trillions in investment commitments.
Despite this, many economic analysts fear the tariffs could slow growth and increase inflation. Last week, US markets fell to levels not seen since before Trump’s election in 2022. Rachel Winter, an investment manager, told the BBC that the tariffs will likely cause inflation and hurt the economy in the long run.
The slump in Tesla’s stock is partly due to uncertainty over tariffs, which could raise production costs and prices for car parts from Canada and Mexico.
Economist Mohamed El-Erian said investors are now adjusting their expectations, as the market initially underestimated the risks of a trade war.
However, Kevin Hassett, an economic adviser to Trump, remains optimistic. He told CNBC that the tariffs are already bringing jobs and manufacturing back to the US, and he believes the economy will improve.
The BBC highlights that the stock market’s recent drop reflects growing uncertainty about the future of the US economy.
As businesses and households hold off on spending, the risk of slower growth increases, adding to the challenges ahead.
(This simplified version is based on the original BBC report.)
https://www.bbc.com/news/articles/c4gdwgjkk1no