Dow Jones Falls 2.08%, Nasdaq Plummets 4% Amid Recession Fears, Tesla Drops 15.23%

On Monday, the U.S. stock market experienced a significant downturn, with the Dow Jones Industrial Average falling by 2.08%, the S&P 500 index dropping by 2.7%, and the Nasdaq plummeting by 4%. This market turmoil was triggered by heightened concerns over a potential U.S. economic recession, fueled by President Trump's remarks on the "transitional period" of the U.S. economy. The tech-heavy Nasdaq suffered its worst day since September 2022, with major indices experiencing substantial declines. Large-cap tech stocks fell across the board, with Tesla falling by over 15%, marking its largest drop since September 2020, with its stock price nearly halved from its all-time high. The combined market value of the seven tech giants evaporated by over $830 billion on Monday, setting a record for the highest single-day market value loss.

The U.S. stock market's decline led to a crash in the cryptocurrency market. Bitcoin hit a low of $76,600, marking a new low in nearly 4 months, essentially returning to the level when Trump won the election last year. At the time of writing, it had slightly rebounded to $79,125, with a 24-hour decline of about 3.5%. Mainstream altcoins including Ethereum and Solana also experienced a significant drop, with Ethereum falling below $1,800, hitting its lowest level since October 2023.

In the commodity market, safe-haven sentiment bolstered a slight rise in the U.S. dollar index, while the oil market came under pressure, with international oil prices falling by 1.5%. Influenced by profit-taking and the stock market's weakness, spot gold fell by 0.7%.

Over the past two months, the uncertainty surrounding Trump's tariff policy has continued to heighten market fears of a U.S. economic recession. An increasing number of views believe that to achieve the long-term goals of tariffs and reducing the size of the government, Trump may tolerate a short-term economic and market downturn. Currently, the Federal Reserve has entered a silent period before the FOMC meeting on March 19th, and the market cannot obtain new policy guidance from officials' statements.

Arthur Hayes, co