Recommended Watch: Markets Rocked by Trump Show Economic Fear Across Wall Street: Analysis of Today's Selloff
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What had been a steady pullback from the US stock market accelerated sharply Monday as investors retreated from virtually every type of risk.
Tech stocks tumbled by the most since 2022 — driving the Nasdaq 100 Index down nearly 4%. Crypto prices slid. Corporate bond sales were scrapped. A gauge of credit risk surged. And Treasuries rallied, pulling yields down steeply, as they reprised their role as the haven of last resort.
Within the stock market itself, shifts in and out of different sectors told the same story: Growing fear that President Donald Trump’s tariff hikes, spending cuts and geopolitical shakeups will stall what until recently has been an economy that constantly defied naysayers with its strength.
Trump and his surrogates have started warning that retooling the US economy may bring some near-term pain — and investors are preparing for just that. As the carnage piled up, they took refuge in shares of energy, consumer staples and utility companies — relatively spending-cut free industries that tend to fare well during recessions.
“If you’re a long-only equity investor, you still have to put your money somewhere,” said Steve Sosnick, chief strategist at Interactive Brokers. “If investors perceive that there’s rough weather ahead, these are the places where investors tend to hide out. Shelter from the storm.”
The movements show the remarkable shift in sentiment less than two months into Trump’s presidency, which was once seen as likely spur the market forward by pouring stimulus onto an already solidly expanding economy.
Instead, there’s now building angst that the chaotic rollout of Trump’s tariff hikes and spending and job cuts across the federal government will have the opposite effect. And that’s threatening a major reversal for a US stock market that had rallied to record highs as the engine of American corporate profits kept humming.
“Investors are starting to whisper the ‘R word,’ recession,” said Sam Stovall, chief investment strategist at CFRA. “Bull markets don’t die of old age, they die of fright. And what they’re most afraid of is recession.”
Watch comprehensive cross-platform coverage of the U.S. market close with analysis on today's market selloff as seen live on Bloomberg Television, Bloomberg Radio, and YouTube with Romaine Bostick, Scarlet Fu, Carol Massar and Tim Stenovec.
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Tech stocks tumbled by the most since 2022 — driving the Nasdaq 100 Index down nearly 4%. Crypto prices slid. Corporate bond sales were scrapped. A gauge of credit risk surged. And Treasuries rallied, pulling yields down steeply, as they reprised their role as the haven of last resort.
Within the stock market itself, shifts in and out of different sectors told the same story: Growing fear that President Donald Trump’s tariff hikes, spending cuts and geopolitical shakeups will stall what until recently has been an economy that constantly defied naysayers with its strength.
Trump and his surrogates have started warning that retooling the US economy may bring some near-term pain — and investors are preparing for just that. As the carnage piled up, they took refuge in shares of energy, consumer staples and utility companies — relatively spending-cut free industries that tend to fare well during recessions.
“If you’re a long-only equity investor, you still have to put your money somewhere,” said Steve Sosnick, chief strategist at Interactive Brokers. “If investors perceive that there’s rough weather ahead, these are the places where investors tend to hide out. Shelter from the storm.”
The movements show the remarkable shift in sentiment less than two months into Trump’s presidency, which was once seen as likely spur the market forward by pouring stimulus onto an already solidly expanding economy.
Instead, there’s now building angst that the chaotic rollout of Trump’s tariff hikes and spending and job cuts across the federal government will have the opposite effect. And that’s threatening a major reversal for a US stock market that had rallied to record highs as the engine of American corporate profits kept humming.
“Investors are starting to whisper the ‘R word,’ recession,” said Sam Stovall, chief investment strategist at CFRA. “Bull markets don’t die of old age, they die of fright. And what they’re most afraid of is recession.”
Watch comprehensive cross-platform coverage of the U.S. market close with analysis on today's market selloff as seen live on Bloomberg Television, Bloomberg Radio, and YouTube with Romaine Bostick, Scarlet Fu, Carol Massar and Tim Stenovec.
--------
Watch Bloomberg Radio LIVE on YouTube
Weekdays 7am-6pm ET
WATCH HERE: http://bit.ly/3vTiACF
Follow us on X:
/ bloombergradio Subscribe to our Podcasts:
Bloomberg Daybreak: http://bit.ly/3DWYoAN
Bloomberg Surveillance: http://bit.ly/3OPtReI
Bloomberg Intelligence: http://bit.ly/3YrBfOi
Balance of Power: http://bit.ly/3OO8eLC
Bloomberg Businessweek: http://bit.ly/3IPl60i
Listen on Apple CarPlay and Android Auto with the Bloomberg Business app:
Apple CarPlay: https://apple.co/486mghI
Android Auto: https://bit.ly/49benZy
Visit our YouTube channels:
Bloomberg Podcasts:
/ bloombergpodcasts Bloomberg Television:
/ @markets Bloomberg Originals:
/ bloomberg Quicktake:
/ @bloombergquicktake