The US economy took another hit on Monday as President Donald Trump expressed uncertainties about a possible recession. Tesla shares plummeted by 15% to $222, marking a significant decline from its peak value of $479.86 on December 17. Despite this, Elon Musk reassured investors that the company would recover in the long run.
The Nasdaq Composite and S&P 500 both experienced substantial drops, with the former falling by over 4% and the latter by 2.7% – the largest daily percentage decrease since December 18. The CBOE Volatility Index, known as Wall Street’s «fear gauge,» spiked by 3.6 points to reach 27, its highest level since December 18.
The market downturn also affected airlines and other consumer-dependent businesses, as well as the cryptocurrency market. Bitcoin’s value dropped below $79,000 from over $100,000 in December, with US tech stocks facing the brunt of the recent sell-off on Wall Street.
Trade tensions, including tariffs of up to 25% on goods from Canada and Mexico, along with signs of slowing US economic growth, have contributed to the market volatility. China and the European Union have also been targeted with tariffs, further adding to the economic uncertainty.
President Trump’s administration has been criticized for its handling of the economy, with concerns about a potential recession looming. Despite this, Trump emphasized the importance of bringing wealth back to America, acknowledging the challenges of the transition period.
In a recent interview, Kevin Hassett, head of the US National Economic Council, expressed optimism about the future of the US economy. While there are concerns about GDP contraction in the first quarter and inflation, Hassett highlighted several reasons to be bullish about the economy moving forward.
Although the current administration has blamed the previous government for economic challenges, data shows that GDP growth exceeded expectations and consumer spending remained strong when Trump took office in January. Unemployment rates were also at historic lows during that time.
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