Stocks Slump as Recession Fears Shake Wall Street: Impact of Trade Policies

Economic Uncertainty and Trade Tariffs

The stock market kicked off the week with losses Monday as growing concerns about the U.S. economy and the impact of President Trump's trade policy rattled investors. The Dow Jones Industrial Average opened with a 1 percent loss, falling 402 points after the opening bell. Additionally, the NASDAQ composite was down 2.9 percent and the S&P 500 index decreased 1.8 percent.

Impact of Economic Data

• Stocks have faced a steady decline since March due to underwhelming economic data.
• Concerns over the state of the economy have intensified following job data and inflation readings.

Trump's Trade Tariffs

Furthermore, Wall Street's fears of a recession have heightened as President Trump rattles markets with constant shifts in tariffs affecting Mexico, Canada, and China. Trump imposed 25 percent tariffs on all Mexican and Canadian goods but later exempted some imports under the USMCA. This trade war has sparked concerns among economists regarding the potential economic impact of increased costs and reduced exports.

Market Reactions

The Mexican government is currently refraining from retaliation, but the Canadian government has begun imposing tariffs, increasing fees on energy exports and removing some American products from their shelves. Amidst these turbulent times, when asked about potential recession causation, Trump remained evasive, expressing optimism about the economic transition.