On March 10, the US stock market opened in the red after President Donald Trump declared that the economy was entering a "transitional phase" and did not rule out the possibility of a recession, in a television interview.
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| Stock prices have fallen sharply this month due to uncertainty surrounding President Donald Trump's tariff policies. (Source: Getty Images) |
Responding on Fox News ' "Sunday Morning Futures With Maria Bartiromo" when asked if the US would fall into a recession this year, President Donald Trump said: "I hate to predict this. We are in a transition period because very big changes are taking place."
With this statement, the Dow Jones index fell 411 points (0.96%) at the opening. The S&P 500 lost 1.4%, while the Nasdaq Composite plunged 1.95%.
The market has been under pressure this month as he continues to push back on tariffs, with the S&P 500 down 3.1% last week alone, its worst week since September.
Donald Trump had threatened to impose high tariffs on imports from Canada and Mexico, but then postponed it until April 2.
The White House chief also announced a doubling of import tariffs from China, from 10% to 20%, while a 25% tariff on steel and aluminum will take effect from March 12.
He also threatened to impose a 250% tariff on Canadian dairy products and “extremely high” tariffs on Canadian lumber. In an interview on March 9, he stressed that tariffs “could continue to increase over time.”
“In fact, the tariff announcements are more destabilizing than their implementation,” said David Bahnsen, chief investment officer at Bahnsen Group. “The constant shifting of positions, speculation, and chaos only add to the anxiety.”
Other signs point to a strained U.S. economy. Layoffs are rising, hiring is slowing, consumer confidence is falling, and inflation is trending up.
This week, investors will focus on monthly inflation data, due on Wednesday and Thursday, to gauge whether inflation continued to persist in February.
By economic definition, a recession occurs when GDP declines for two consecutive quarters. The National Bureau of Economic Research (NBER) Business Cycle Determination Committee – the official authority on the matter – says a recession “reflects a significant decline in economic activity that is widespread across the economy and lasts for more than a few months.”
Mr. Sam Stovall - Chief Investment Strategist at CFRA Research commented: "Investor caution will last until global trade tensions cool down and the risk of recession decreases."
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