President Donald Trump’s tariffs have unsettled investors, with concerns over a potential economic downturn leading to a stock market sell-off that has erased $4 trillion from the S&P 500’s peak last month, a time when Wall Street largely supported much of Trump’s agenda.
A series of new policies from Trump has increased uncertainty for businesses, consumers, and investors, particularly his fluctuating tariff actions against major trading partners such as Canada, Mexico, and China, according to reports.
“We’ve seen clearly a big sentiment shift,” said Ayako Yoshioka, senior investment strategist at Wealth Enhancement. “A lot of what has worked is not working now.”
The stock market downturn intensified on Monday, with the S&P 500 dropping 2.7%, marking its largest daily decline of the year. The Nasdaq Composite fell 4%, its steepest one-day drop since September 2022.
As of Monday, the S&P 500 closed 8.6% down from its record high on February 19, wiping out over $4 trillion in market value and approaching a 10% decline, which would signal a correction for the index. The tech-heavy Nasdaq ended the week down more than 10% from its December peak.
Over the weekend, Trump refrained from forecasting whether the U.S. could face a recession, as investors expressed concern about the long-term effects of his trade policies.
Delta Air Lines (DAL.N) also downgraded its first-quarter profit outlook by 50% on Monday, causing its stock to drop 14% in after-hours trading. CEO Ed Bastian attributed the lowered forecast to increased U.S. economic uncertainty.
