The U.S. stock market experienced a significant downturn on Monday as concerns over the economic impact of ongoing trade tensions deepened. The S&P 500 fell 2.7%, while the Dow Jones Industrial Average dropped 2.1%. The Nasdaq composite suffered the sharpest decline, sinking 4%.

Tesla, airlines, and other consumer-driven companies faced heavy losses, reflecting growing fears about economic instability. Bitcoin also saw a sharp decline, falling below $79,000 from its December high of over $100,000.

The market's volatility has intensified, with the S&P 500 experiencing swings of more than 1% in seven of the last eight trading sessions. Investors are particularly concerned about the unpredictable nature of President Donald Trump’s tariff policies, which could either directly harm the economy or create enough uncertainty to stall business investments and consumer spending.

As of late Monday trading, the S&P 500 was down 3%, on track for its biggest single-day drop since the inflation crisis of 2022. The Dow Jones was down 956 points, or 2.2%, while the Nasdaq had fallen 4.3%.

The Federal Reserve Bank of Atlanta’s economic indicators suggest that the U.S. economy may already be contracting, adding to fears of an impending recession. Over the weekend, Trump commented on the economic outlook, telling Fox News that while a “period of transition” is underway, the administration is focused on bringing wealth and manufacturing jobs back to the U.S.

Treasury Secretary Scott Bessent echoed these sentiments, warning of a potential “detox” period as the economy adjusts to reduced government spending. Meanwhile, White House policies aimed at cutting the federal workforce and increasing deportations could further impact job market stability.