US stock market falls on recession fears

NEW YORK — Global markets slumped Monday as Wall Street posted steep losses amid worries that US President Donald Trump’s trade policies could send the world’s biggest economy into a recession.

In the United States, the tech-heavy Nasdaq Composite Index dropped 4.0 percent, suffering its worst day since 2022 after Trump refused to dismiss the possibility of a US recession.

“There’s a period of transition because what we do is very big — we’re bringing wealth back to America,” Trump said in an interview with Fox News on Sunday.

Trump has levied sweeping tariffs on imports coming from Canada, Mexico and China since taking office in January — before announcing a limited rollback with the two US neighbors.

A new wave of protectionism is set to arrive this week, in the form of steep levies of 25 percent on imports of steel and aluminum that are scheduled to go into effect on Wednesday.

Uncertainty from Trump’s tariffs and threats has sent US financial markets into a tailspin and has consumers and spending unsure of what the year may hold.

“President Trump appears to have given up on the US stock market and is prepared to risk his political future so long as he can push through his political vision over the short-term picture for the US economy,” Kathleen Brooks, research director at trading platform XTB, said in a note.

The Nasdaq was dragged lower by declines in the so-called Magnificent Seven tech stocks that also include Google parent Alphabet, Apple, Amazon, Meta, and Nvidia.

Shares in electric carmaker Tesla, headed by Trump’s billionaire adviser Elon Musk, finished up more than 15 percent.

Where hopes of tax cuts and less onerous regulation once underpinned markets, Steve Sosnick of Interactive Brokers said sentiment had become bogged down in more immediate concerns about tariffs.

“Confusion over tariffs continues, and fears that perhaps the DOGE cuts are too much have been leading to poor consumer sentiment, and are leading to fears of a slowdown or higher inflation or both,” he said.

Musk and his Department of Government Efficiency (DOGE) — Sosnick was referring to sweeping cuts to the federal government under Musk and DOGE.

Susannah Streeter, head of money and markets at Hargreaves Lansdown said: “The specter of recession in the US is hovering, with consumer confidence sliding, companies facing mounting trade complexity and investors growing more twitchy.

German spending plan –

Stock markets in London, Paris and Frankfurt all finished lower.

The European Union’s trade commissioner, Maros Sefcovic, lamented that “the U.S. administration does not seem to engage in order to find a deal” to avoid tariffs on the 27-nation bloc.

Brooks of XTB said investors had also been reacting to news that Germany’s chancellor-in-waiting, Friedrich Merz, may face opposition to a gigantic spending plan that they have sent markets soaring last week.

Germany’s Green party said on Monday it would not supply the votes needed to approve Merz’s proposals to partially lift spending ceilings on defense and create a 500-billion-euro ($540-billion) infrastructure fund.

Tokyo eventually rose after closing lower earlier, but Hong Kong and Shanghai stock markets were down after data over the weekend showed Chinese consumer prices fell 0.7 percent in February, their first decline in 13 months.

“The data does nothing but reinforce what has been apparent for some months now — deflationary pressure remains firmly entrenched in the world’s second-largest economy,” said Stephen Innes at SPI Asset Management.

Beijing’s retaliatory tariffs on some US agricultural products took effect on Monday after Chinese goods were subjected to an additional 20 percent US tariffs.

Major figures as of 2100 GMT –

New York - Dow: DOWN 2.1 percent, 41,911.71 points (close)

New York – S&P 500: DOWN 2.7 percent to 5,614.56 (close)

New York – Nasdaq: DOWN 4.0 percent at 17,468.32 (close)

London – FTSE 100: DOWN 0.9 percent at 8,600.22 (close)

Paris – CAC 40: DOWN 0.9 percent at 8,047.60 (close)

Frankfurt — DAX: DOWN 1.7 percent at 22,620.95 (close)

Tokyo – Nikkei 225: UP 0.4 percent at 37,028.27 (end)

HONG KONG — Hang Seng Index: DOWN 1.9 percent at 23,783.49 (close)

Shanghai — Composite: DOWN 0.2 percent at 3,366.16 (close)

Euro/dollar: HIGHER at $1.0836, from $1.0844 dollar on Friday

Pound/dollar: DOWN at $1.2878 from $1.2925

Dollar/yen: DOWN at 147.26 yen from 147.97 yen

Euro/pound: UP at 84.13 pence (83.87)

Brent North Sea Crude: DOWN 1.5% at $69.28 a barrel

West Texas Intermediate: DOWN 1.5 percent to $66.03 a barrel