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The Nasdaq fell 4% to a near six-month low amid fears of an economic slowdown due...
Read More The tech-heavy Nasdaq led sharp losses among major U.S. stock indexes on Monday, plunging 4% to a near six-month low, on fears that U.
S. President Donald Trump’s tariff policies would spark an economic slowdown. The benchmark S&P 500 (.
SPX), opens new tab has fallen over 8% from its February high. The Nasdaq confirmed a correction last week, having tumbled more than 10% from its December all-time high. Financial markets have been volatile in recent weeks as rising trade tensions and signs of slowing U.
S. economic growth weighed on consumer confidence and business activity. Richly valued U.
S. tech stocks have borne the brunt of the recent selloff on Wall Street. “The Nasdaq has been risk-off all year long .
.. that’s just the unfortunate combination of very high valuations, which is where we started the year, and then increased uncertainty just in general," said Chris Zaccarelli, chief investment officer, Northlight Asset Management.
In an interview on Sunday, Trump declined to predict whether the U.S. could face a recession, at a time when investors are concerned that his fluctuating trade policies on Mexico, Canada and China could dampen consumer demand and corporate investment.
China’s retaliatory tariffs on select U.S. imports are set to take effect on Monday, with U.
S. tariffs on certain base metals anticipated later in the week. The S&P 500 is also poised to close below its 200-day moving average for the first time since November 2023.
Analysts view this as a crucial support level, with a break potentially signaling a larger selloff ahead. The CBOE Volatility Index (.VIX), opens new tab, often dubbed Wall Street’s “fear gauge," surged over 3.
6 points to hit 27, marking its highest level since December 18. A Reuters poll showed 91% of economists see higher recession risks due to Trump’s shifting trade policies. HSBC also downgraded U.
S. stocks, citing uncertainty around tariffs. At 1:11 p.
m. ET, the Dow Jones Industrial Average (.DJI), opens new tab fell 659.
20 points, or 1.54%, to 42,139.77, the S&P 500 (.
SPX), opens new tab lost 147.97 points, or 2.56%, to 5,622.
23 and the Nasdaq Composite (.IXIC), opens new tab lost 740.45 points, or 4.
07%, to 17,455.77. An analyst also pointed to tech stocks coming under pressure from a stronger Japanese yen and a spike in sovereign bond yields, as investors unwound yen carry trades on expectations of an upcoming interest rate hike in Japan.
The carry trades involve borrowing yen at a low cost to invest in other currencies and assets offering higher yields. “The carry trade is unwinding and all that hot money was in Magnificent Seven stocks ..
. that’s why tech is down," said Thomas Hayes, chairman at Great Hill Capital LLC. Heavyweight growth stocks such as Nvidia (NVDA.
O), opens new tab fell 5.2%, while Microsoft (MSFT.O), opens new tab and Amazon.
com (AMZN.O), opens new tab declined around 3.2% each.
The broader technology sector (.SPLRCT), opens new tab fell more than 4.5%, while the small-cap Russell 2000 index (.
RUT), opens new tab dipped 2.1%. JPMorgan Chase (JPM.
N), opens new tab and Goldman Sachs (GS.N), opens new tab also retreated, dragging down the broader banks index (.SPXBK), opens new tab.
Defensive stocks such as consumer staples (.SPLRCS), opens new tab and utilities (.SPLRCU), opens new tab were marginally higher.
Tesla (TSLA.O), opens new tab was down 13%, lowest since October 2024, after UBS cut its forecast for the automaker’s first-quarter deliveries. Data on inflation, job openings and consumer confidence are due later in the week.
On Friday, investors took some comfort from Fed Chair Jerome Powell’s comments that the economy was on a strong footing, but he also underscored the need for caution on lowering borrowing costs. The Federal Open Market Committee will convene next week and traders expect policy rates to be left unchanged for the first half of this year, according to data compiled by LSEG. Crypto stocks such as MicroStrategy (MSTR.
O), opens new tab slid 15.2%, while Coinbase (COIN.O), opens new tab fell 11% tracking lower bitcoin prices.
Declining issues outnumbered advancers for a 2.38-to-1 ratio on the NYSE and a 3.49-to-1 ratio on the Nasdaq.
The S&P 500 posted 24 new 52-week highs and 10 new lows, while the Nasdaq Composite recorded 26 new highs and 200 new lows..
