New York: US markets suffered a steep selloff on Monday as investor fears intensified following President Donald Trump’s refusal to rule out a potential recession. Concerns over his tariff-driven trade policies further unsettled already jittery markets, triggering sharp declines in stocks and Bitcoin.

Markets in Freefall

All three major stock indices opened lower and extended losses throughout the session. The Dow Jones Industrial Average tumbled 890 points, after briefly plunging over 1,100 points. The S&P 500 shed 2.7%, while the Nasdaq Composite fell 4%, marking its worst single-day performance since September 2022.

According to a Reuters report, Trump’s tariff policies have erased nearly $4 trillion in market value from the S&P 500 since its peak last month. Technology stocks bore the brunt, with major firms like Alphabet (GOOG), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA) posting significant losses.

Tesla led the decline, plunging 15.4%, extending its year-to-date drop to nearly 45%, amid declining European sales and mounting backlash over Elon Musk’s ties to the Trump administration.

“The stock market is losing confidence in Trump 2.0,” said Ed Yardeni, President of Yardeni Research. Anthony Saglimbene, a market strategist at Ameriprise, added: “Trump’s failure to rule out a recession has only deepened investor anxiety.”

Bitcoin and Fear Index Surge

Bitcoin also plummeted, falling to around $78,000, its lowest level since November, as investors retreated from high-risk assets. Meanwhile, the CBOE Volatility Index (VIX), known as Wall Street’s “fear gauge,” spiked to its highest level of the year.

White House Downplays Concerns, But Economic Uncertainty Grows

The White House moved quickly to calm fears, insisting that Trump’s “America First” economic policies would drive long-term growth.

Kush Desai, a White House spokesperson, stated: “Since Trump was elected, industry leaders have responded to his agenda with trillions in investment commitments that will create thousands of jobs.”

Despite these reassurances, market volatility persists. The stock market just endured its worst week since the November election, while consumer confidence has weakened amid rising inflationary pressures.

Trump’s recent moves to double tariffs on Chinese imports—from 10% to 20%, along with a 25% tariff on steel and aluminum set to take effect on March 12, have further fueled uncertainty. The president has also threatened a 250% tariff on Canadian dairy products and additional levies on lumber imports.

As economic concerns mount, investors are seeking safety in government bonds. The 10-year US Treasury yield fell to 4.225%, reflecting increased demand for low-risk assets.

Trump’s Ambiguous Response on Recession

During an interview with Fox News’ Sunday Morning Futures, Trump refused to provide a clear answer when asked if the US is heading toward a recession in 2025.

“I hate to predict things like that,” he said. “This is a period of transition. What we’re doing is very big—we’re bringing wealth back to America. It just takes time.”

Commerce Secretary Howard Lutnick, however, was more direct in dismissing recession concerns, telling NBC, “Absolutely not.”

Yet economic warning signs continue to flash. Layoffs are accelerating across government agencies, with Elon Musk advising on cost-cutting measures. When reporters pressed Trump again aboard Air Force One, he simply responded, “Who knows?”

Alarming Economic Indicators

The Atlanta Federal Reserve now predicts a 2.4% contraction in Q1 2025 GDP growth, marking the worst economic performance since the Covid-19 pandemic.

Kevin Hassett, Trump’s chief economic advisor, hinted that tariffs may become permanent, depending on how trade partners respond.

In his State of the Union address, Trump acknowledged market instability but sought to downplay concerns. “We’re okay with a little disturbance. It won’t be much,” he assured Americans.

However, Goldman Sachs has raised the probability of a US recession within the next 12 months from 15% to 20%, while Morgan Stanley has cut its growth forecast.

The last US recession, defined as two consecutive quarters of negative GDP growth, occurred in early 2020, when the Covid-19 crisis led to widespread job losses and economic contraction.

With key inflation data set for release this week, investors remain on edge, watching closely for signs of further economic trouble.