Elon Musk blames ‘massive cyberattack’ for extended X outage The billionaire said on the Fox Business Network show “Kudlow” that the attackers had “IP addresses originating in the Ukraine area.”

Nearly 1 in 4 U.S. tech job postings now require AI skills.
This demand extends beyond tech companies, reaching sectors like finance, retail, and healthcare.

Rewards professionals will need to consider how AI skills impact pay structures as employees with AI expertise tend to earn higher salaries (and appear to be less likely to be laid off).

Social media platform X went down multiple times on Monday due to what billionaire owner Elon Musk called a “massive cyberattack.”

“We get attacked every day, but this was done with a lot of resources,” Musk said in an X post. “Either a large, coordinated group and/or a country is involved. Tracing …”

According to Downdetector, an online tracker of service outages, thousands of X users reported outages beginning around 6 a.m. ET. The social media platform is back online as of Monday afternoon, but Musk has not commented further on the cyberattack.

 President Donald Trump’s tariffs have spooked investors, with fears of an economic downturn driving a stock market sell-off that has wiped out $4 trillion from the S&P 500’s peak last month, when Wall Street was cheering much of Trump's agenda.

A barrage of new Trump policies has increased uncertainty for businesses, consumers, and investors, notably back-and-forth tariff moves against major trading partners like Canada, Mexico and China.

"We've seen clearly a big sentiment shift," said Ayako Yoshioka, senior investment strategist at Wealth Enhancement. "A lot of what has worked is not working now."

The stock market selloff deepened on Monday. The benchmark S&P 500 (.SPX), opens new tab fell 2.7%, its biggest daily drop of the year. The Nasdaq Composite (.IXIC), opens new tab slid 4%, its largest one-day decline since September 2022.

The S&P 500 on Monday closed down 8.6% from its February 19 record high, shedding over $4 trillion in market value since then and nearing a 10% decline that would represent a correction for the index. The tech-heavy Nasdaq ended Thursday down more than 10% from its December high.

Trump over the weekend declined to predict whether the U.S. could face a recession as investors worried about the impact of his trade policy.

"The amount of uncertainty that has been created by the tariff wars about Canada, Mexico, and Europe, is causing boards and C-suites to reconsider the pathway forward," Peter Orszag, CEO of Lazard, speaking at the CERAWeek conference in Houston.

"People can understand ongoing tensions with China, but the Canada, Mexico, and Europe part is confusing. Unless that gets resolved over the next month or so, this could do real damage to the economic prospects of the US and M&A activity," Orszag said.

Delta Air Lines (DAL.N), opens new tab on Monday and slashed its first-quarter profit estimates by half, sending its shares down 14% in aftermarket action. CEO Ed Bastian blamed heightened U.S. economic uncertainty.

Investors are also watching whether lawmakers can pass a funding bill to avert a partial federal government shutdown. A U.S. report on inflation looms on Wednesday.

"The Trump administration seems a little more accepting of the idea that they're OK with the market falling, and they're potentially even OK with a recession to exact their broader goals," said Ross Mayfield, investment strategist at Baird. "I think that's a big wake-up call for Wall Street."

The percentage of total corporate equities and mutual fund shares that are owned by the bottom 50% of the U.S. population, ranked by wealth, stands at about 1%, while the same measure for the top 10% of the population by wealth stood at 87%, according to Federal Reserve Bank of St. Louis data as of July 2024.

The S&P 500 tallied back-to-back gains of over 20% in 2023 and 2024, led by megacap technology and tech-related stocks such as Nvidia (NVDA.O), opens new tab and Tesla (TSLA.O), opens new tab that have struggled so far in 2025, dragging major indexes.

On Monday, the S&P 500's technology sector (.SPLRCT), opens new tab dropped 4.3%, while Apple (AAPL.O), opens new tab and Nvidia both fell about 5%. Tesla tumbled 15%, shedding about $125 billion in value.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 12, 2025. REUTERS/Brendan McDermid/File Photo Purchase Licensing Rights, opens new tab

Other risk assets were also punished, with bitcoin dropping 5%.

Some defensive areas of the market held up better, with the utilities sector (.SPLRCU), opens a new tab logging a 1% daily gain. Safe-haven U.S. government debt saw more demand, with benchmark 10-year Treasury yields, which move inversely to prices, down to about 4.22%.

INVESTOR UNEASE

The S&P 500 has given up all gains recorded since Trump's November 5 election, and it is down nearly 3% in that time. Hedge funds reduced exposure to stocks on Friday at the largest amount in more than two years, according to a Goldman Sachs note released on Monday.

Investors had expressed optimism that Trump's expected pro-growth agenda including tax cuts and deregulation would benefit stocks, but uncertainty over tariffs and other changes including federal workforce cuts, has dampened sentiment.

"It was the overwhelming consensus that everything was going to be this great environment once President Trump came into office," said Michael O’Rourke, chief market strategist at JonesTrading.

"Every time you have structural change you're going to have uncertainty and you're going to have friction," O'Rourke said. "It's understandable people are starting to be a little concerned and starting to take profits."

Even with the recent selloff, stock market valuations remain significantly above historic averages. The S&P 500 as of Friday was at just above 21 times earnings estimates for the next year, compared to its long-term average forward P/E of 15.8, according to LSEG Datastream.

"Many people have been worried about elevated valuations among U.S. equities for some time and looking for the catalyst for a market correction," said Dan Coatsworth, investment analyst at AJ Bell. "A combination of concerns about a trade war, geopolitical tensions, and an uncertain economic outlook could be that catalyst."

Bar chart showing The percentage of total corporate equities and mutual fund shares that are owned by people of different wealth.

Investors' equity positioning has fallen in recent weeks, dipping to slightly underweight for the first time since briefly hitting that level in August, Deutsche Bank analysts said in a note on Friday.

A further retreat to the bottom of the historic range for equities weighting, as seen during Trump's U.S.-China trade war in 2018-2019, could drag the S&P 500 to as low as 5,300, or down another 5.5% from current levels, they added.

In another sign of growing investor unease, the Cboe Volatility index (.VIX), opens new tab on Monday and reached its highest closing level since August.

The administration is "still trying to figure out how to define a win politically, economically, and what is the right timeframe," said Edward Al-Hussainy, senior interest rate and currency analyst at Columbia Threadneedle Investments. "And until they do that, it's going to be like this every week."

It’s been 25 years since the dot-com bubble peaked and then sent overhyped tech stocks plummeting. As The Wall Street Journal notes, some investors are concerned about parallels with the current artificial intelligence boom. While only time will tell how AI plays out, several of today’s tech giants emerged from “seeds planted” during the dot-com era. That period had traits of what investors call a “good bubble,” which fueled tech adoption, as opposed to a “bad bubble,” based on unproductive speculation.

Canadian province Ontario imposed a 25% surcharge on its electricity exports to the United States on Monday, with the province's premier, Doug Ford, threatening to increase the charge or even cut off all electricity to the country should the U.S. continue to enact tariffs on Canada. The charges are expected to impact approximately 1.5 million businesses and households in Michigan, Minnesota, and New York. Meanwhile, Canadian travel to the U.S. has dropped sharply since the trade war began.

Apple is planning a "dramatic" software system overhaul that will alter the look of the iPhone, iPad, and Mac's interfaces, Bloomberg reports, citing anonymous sources. The changes, set to arrive later this year, will make Apple's different operating systems more cohesive in both design and function. The revamp includes updates to "the style of icons, menus, apps, windows, and system buttons," inspired by Vision Pro’s vision software, per Bloomberg. The news follows Apple's recent rapid-fire product rollout.

The threat of losing federal funding has hit research universities hard, including Ivy League institutions. Harvard is the latest to announce a staff-and-faculty hiring freeze, saying the move will help maintain "financial flexibility" during Trump-era uncertainty. Fellow Ivies Cornell and Columbia University instituted similar hiring pullbacks last week, as have other elite universities, such as Stanford and the Massachusetts Institute of Technology. At the same time, many of these universities are rescinding offers to graduate students as programs shrink.

Delta Air Lines slashed its first-quarter earnings and revenue outlook Monday, saying that a recent decline in consumer and corporate confidence amid growing uncertainty over the economy is weakening domestic demand.

The company noted that its premium, international and loyalty revenue growth trends remained consistent with expectations.

Shares in the Atlanta-based carrier fell 13.2% in after-hours trading after closing 5.5% lower during the regular session. The stock is down 16.8% so far this year.

The airline released its updated guidance a day before its executives were scheduled to give a presentation at the J.P. Morgan Industrials Conference.

Delta expects first-quarter revenue will rise between 3% and 4% compared to a year earlier. That’s below the company’s previous outlook for revenue growth between 7% and 9%.

The airline also predicted its first-quarter earnings per share will range between 30 cents and 50 cents. That’s down from its prior guidance, which called for earnings per share between 70 cents and $1.

In January, Delta released fourth-quarter results that topped Wall Street’s profit and revenue estimates, as the company benefited from strong demand during the crucial holiday period.

But in the weeks since, the U.S. economy has begun showing signs of weakening, mostly through surveys showing increased pessimism. A widely followed collection of real-time indicators compiled by the Federal Reserve Bank of Atlanta suggests the U.S. economy may already be shrinking.

Uncertainty over the impact that the Trump administration’s tariffs on imported goods from Canada, Mexico, China, and elsewhere will have on consumers and businesses is also weighing on the stock market.

Delta’s dimmer outlook comes less than a month since one of the airline’s jets burst into flames and flipped upside down as it tried to land in Toronto. Miraculously, all 80 people on board the flight from Minneapolis to Toronto’s Pearson International Airport survived.

The U.S. buys more steel from Canada than any other country, and those imports will become more expensive under the new 25% tariffs President Donald Trump plans to impose this week.

For American steelmakers like Capone Iron Corporation in Massachusetts, the tariffs are a welcome relief from cheaper Canadian competition.

“No matter how low we bid, they can underbid us on any job,” said company president Stephen Capone.

However many businesses fear rising costs and retaliation. Ford CEO Jim Farley warned tariffs could “blow a hole” in the U.S. auto industry, and retailers expect higher consumer prices.

Despite opposition, steel and aluminum industry leaders argue tariffs will drive domestic investment.

Trump initially imposed Section 232 tariffs in his first term, but Canada and Mexico gained exemptions under the 2020 trade deal. The new tariffs remove those exemptions, applying to all steel and aluminum imports from both countries.

Philip Bell of the Steel Manufacturers Association supports the move, arguing that Mexican firms have been relabeling Chinese steel as locally produced.

The Biden administration had targeted this with selective tariffs, but Trump’s policy goes further.

Canada’s steel industry disputes claims of unfair practices. “We do not contribute to global overcapacity,” said Catherine Cobden of the Canadian Steel Producers Association.

The U.S. relies heavily on imports for aluminum, with 90% of primary aluminum coming from abroad in 2016. Trump’s first tariffs helped revive domestic production, but the industry remains split.

Century Aluminum, the nation’s largest primary aluminum producer, plans to build the first new U.S. smelting plant in 45 years with up to $500 million in Biden administration grants.

However, those funds are under review by the Trump administration.

Meanwhile, some U.S. firms oppose the new tariffs since they operate plants in Canada, raising concerns about supply chain disruptions.

Aluminum Association President Charles Johnson said the U.S. still needs “a reliable source of metal from Canada.”

Higher steel and aluminum costs could lead manufacturers to pass costs to consumers or find substitutes. Steelmakers expanded capacity after Trump’s first tariffs, but fear of oversupply may limit further investment.

With imports making up 23% of the U.S. steel market, the question is whether domestic firms ramp up production—or let prices climb.

Ride-hailing and mobility company Bolt already has a presence in Europe, Africa and Latin America, and it's now beginning to invade North America — putting Uber and Lyft on notice. Bolt CEO Markus Villig tells The Information he plans to compete against his larger rivals by operating leaner and paying drivers more. While Uber and Lyft have a "take rate" of up to 35%, Bolt keeps 15% to 20%, so drivers can keep as much as 85% of fares.

 Long-threatened tariffs from U.S. President Donald Trump have plunged the country into a trade war abroad — all while on-again, off-again new levies continue to escalate uncertainty.

Since taking office less than two months ago, Trump has rolled out hefty import taxes on goods coming from America’s three biggest trading partners — Mexico, Canada, and China — and promises that more targets are on the horizon.

Trump is no stranger to tariffs. He also launched a trade war during his first term in office but has more sweeping plans now. Economists stress there could be greater consequences on businesses and economies worldwide this time — and that higher prices will likely leave consumers footing the bill.

There’s also been a sense of whiplash from Trump’s back-and-forth tariff threats and responding retaliation, including recently postponed levies for some goods from Canada and Mexico that followed a 30-day pause for the auto industry. The uncertainty has roiled financial markets, lowered consumer confidence, and enveloped many businesses with questions that could delay hiring and investment.

Here’s a timeline of how we got here:

Trump’s first term

Trump launches a trade war during his first term in office — taking particular aim at China.

The two countries exchange a series of tit-for-tat levies affecting hundreds of billions of dollars worth of goods. The dispute centers around U.S. allegations that China deploys underhanded tactics — including stealing trade secrets and pressuring U.S. companies to hand over sensitive technology — to supplant the U.S. in advanced fields such as quantum computing and automated cars.

Trump puts tariffs on most Chinese goods. Meanwhile, Beijing responds with its own retaliatory tariffs on U.S. products ranging from fruit, soybeans, and wine to aircraft, automotive and chemical imports.

Separately, Trump slaps tariffs on imported solar panels and washing machines. And in 2018, he imposes taxes of 25% on imported steel and 10% on aluminum imports on national security grounds, escalating tensions with other trading partners. He also uses the threat of more tariffs to force Canada and Mexico to renegotiate a North American trade pact, called the U.S.-Mexico-Canada Agreement, in 2020.

Tariffs under Biden

President Joe Biden largely preserves most of the tariffs Trump previously enacted against China, but his administration claims to take a more targeted approach.

In October 2022, he issued sweeping new restrictions on selling semiconductors and chipmaking equipment to China. These curbs will be expanded in October 2023 and December 2024 — when China responds with a ban of U.S. exports of various high-tech materials like gallium and germanium.

Biden also hiked tariffs on Chinese electric vehicles, solar cells, steel, aluminum, and medical equipment in May 2024. And in July, he imposes tariffs on steel and aluminum shipped from Mexico but made elsewhere in an attempt to stop China from circumventing import taxes.

2024 campaign trail promises

Biden’s 2024 tariff moves come in the middle of a heated presidential campaign — with both Biden and Trump taking jabs at each other in attempts to show who’s tougher on China.

On the campaign trail, Trump says that he plans to impose tariffs of at least 60% on all Chinese imports if he wins a second term. He also floats the idea of a tariff of up to 20% on everything else the U.S. imports while threatening to impose even bigger levies for specific countries or manufacturers that take their business outside the U.S.

While the Biden-Harris administration uses tariffs to target China, both Biden and Vice President Kamala Harris — who becomes the Democratic nominee after Biden drops out of the race — maintain that Trump’s promise of more broad tariffs worldwide would be a mistake. Harris labels Trump’s call for tariffs as a “national sales tax” — with her campaign later saying that a 20% tariff applied across the board would raise expenses for a typical family by almost $4,000 annually.

November 2024

Trump wins the U.S. presidential election. He continues to promise steep tariff hikes in the coming weeks and months leading up to his first day back in office.

January 20

Trump is sworn in. In his inaugural address, he again promises to “tariff and tax foreign countries to enrich our citizens.” And he reiterates plans to create an agency called the External Revenue Service, which has yet to be established.

On his first day in office, Trump also says he expects to put 25% tariffs on Canada and Mexico starting on Feb. 1, while declining to immediately flesh out plans for taxing Chinese imports.

January 26

Trump threatens 25% tariffs on all Colombia imports and other retaliatory measures after President Gustavo Petro’s rejects two U.S. military aircraft carrying migrants to the country, accusing Trump of not treating immigrants with dignity during deportation.

In response, Petro also announces a retaliatory 25% increase in Colombian tariffs on U.S. goods. But Colombia later reversed its decision and accepted the flights carrying migrants. The two countries soon signaled a halt in the trade dispute.

February 1

Trump signed an executive order to impose tariffs on imports from Mexico, Canad, and China — 10% on all imports from China and 25% on imports from Mexico and Canada starting Feb. 4. Trump invoked this power by declaring a national emergency — ostensibly over undocumented immigration and drug trafficking. The levies on Canada and Mexico threaten to blow up Trump’s own USMCA trade deal, which allowed many products to cross North American borders duty-free.

The action prompts swift outrage from all three countries, with promises of retaliatory measures.

February 3

Trump agrees to a 30-day pause on his tariff threats against Mexico and Canada, with both trading partners taking steps to appease Trump’s concerns about border security and drug trafficking.

February 4

Trump’s new 10% tariffs on all Chinese imports to the U.S. still go into effect. China retaliates the same day by announcing a flurry of countermeasures, including sweeping new duties on a variety of American goods and an anti-monopoly investigation into Google.

China’s 15% tariffs on coal and liquefied natural gas products, and a 10% levy on crude oil, agricultural machinery, and large-engine cars imported from the U.S., take effect Feb. 10.

February 10

Trump announces plans to hike steel and aluminum tariffs. He removes the exemptions from his 2018 tariffs on steel, meaning that all steel imports will be taxed at a minimum of 25%, and also raises his 2018 aluminum tariffs to 25% from 10% set to go into effect March 12.

February 13

Trump announces a plan for “reciprocal” tariffs — promising to increase U.S. tariffs to match the tax rates that other countries charge on imports “for purposes of fairness.” Economists warn that the reciprocal tariffs, set to overturn decades of trade policy, could create chaos for global businesses.

Beyond China, Canada, and Mexico, he indicates that additional countries, such as India, won’t be spared from higher tariffs. And in the following weeks, Trump suggests that European countries could face a 25% levy as part of these efforts.

February 25

Trump signed an executive order instructing the Commerce Department to consider whether a tariff on imported copper is needed to protect national security. He cites the material’s use in U.S. defense, infrastructure,e and emerging technologies.

March 1

Trump signed an additional executive order instructing the Commerce Department to consider whether tariffs on lumber and timber are also needed to protect national security, arguing that the construction industry and military depend on a strong supply of wooden products in the U.S.

March 4

Trump’s 25% tariffs on imports from Canada and Mexico go into effect, though he limits the levy to 10% on Canadian energy. He also doubles the tariff on all Chinese imports to 20%.

All three countries promise retaliatory measures. Canadian Prime Minister Justin Trudeau announces tariffs on more than $100 billion of American goods over 21 days. And Mexican President Claudia Sheinbaum says her country would respond with its own retaliatory tariffs on U.S. goods without specifying the targeted products immediately, signaling hopes to de-escalate.

China, meanwhile, imposes tariffs of up to 15% on a wide array of key U.S. farm exports. It also expands the number of U.S. companies subject to export controls and other restrictions by about two dozen.

March 5

Trump grants a one-month exemption on his new tariffs impacting goods from Mexico and Canada for U.S. automakers. The pause arrived after the president spoke with leaders of the “Big 3” automakers — Ford, General Motors, and Stellantis.

March 6

In a wider extension, Trump postpones 25% tariffs on many imports from Mexico and some imports from Canada for a month. But he still plans to impose “reciprocal” tariffs starting on April 2.

Trump credited Sheinbaum with making progress on border security and drug smuggling as a reason for again pausing tariffs — and the Mexican president said in a post on X that she and Trump “had an excellent and respectful call in which we agreed that our work and collaboration have yielded unprecedented results.”

Trump’s actions also thawed relations with Canada somewhat, although outrage and uncertainty over the trade war remain. Still, after its initial retaliatory tariffs of $30 billion Canadian (US$21 billion) on U.S. goods, the government said it had suspended its second wave of retaliatory tariffs worth $125 billion Canadian (US$87 billion).

March 10

China retaliates against Trump’s tariffs by imposing an additional 15% tax on key American farm products, including chicken, pork, soybeans, and beef. The escalating trade tensions pushed stocks lower on Monday as investors worried about the pain Trump’s trade wars risk inflicting on the American economy.

The Chinese tariffs were a response to Trump’s decision to double the levy on Chinese imports to 20% on March 4. China’s Commerce Ministry had earlier said that goods already in transit would be exempt from the retaliatory tariffs until April 12.

 Oil prices fell for a second day on Tuesday, as concerns mounted over a potential U.S. recession, the impact of tariffs on global growth, and as OPEC+ sets its sight on ramping up supply.

Brent futures fell 6 cents, or 0.1%, to $69.22 a barrel at 0402 GMT, while U.S. West Texas Intermediate crude futures lost 13 cents, or 0.2%, to $65.90 a barrel.

U.S. President Donald Trump's protectionist policies have roiled markets across the world, with Trump imposing and then delaying tariffs on his country's biggest oil suppliers, Canada and Mexico, while also raising duties on Chinese goods. China and Canada have responded with tariffs of their own.

Over the weekend, Trump said a "period of transition" for the economy is likely but declined to predict whether the U.S. could face a recession amid stock market concerns about his tariff actions

"Trump's comments triggered a wave of selling as investors started pricing in the risk of weaker growth in demand," Daniel Hynes, senior commodity strategist at ANZ said.

Stocks, which crude prices often follow, slumped on Monday, with all three major U.S. indexes suffering sharp declines. The S&P 500 (.SPX), opens a new tab had its biggest one-day drop since December 18 and the Nasdaq slid 4.0%, its biggest single-day percentage drop since September 2022.

U.S. Commerce Secretary Howard Lutnick said on Sunday Trump would not let up pressure on tariffs on Mexico, Canada, and China.

On the supply front, Russia's Deputy Prime Minister Alexander Novak said on Friday the OPEC+ group agreed to start increasing oil production from April but could reverse the decision afterward if there were market imbalances.

Despite the market noise, Brent at around $70 a barrel is quite a strong support, and oil prices may look to stage a technical bounce at current levels, said Suvro Sarkar, energy sector team lead at DBS Bank, adding that the OPEC+ supply response will continue to remain flexible depending on market conditions.

"If oil prices fall below the $70 per barrel mark for an extended period, output hikes may be paused in our opinion. OPEC+ will also keep a careful eye on Trump's Iran and Venezuela policies," he said.

"The U.S. has already taken back Chevron's license to operate in Venezuela and it remains to be seen whether Iran sanctions will be intensified. However, in the interim, worries about global growth amid policy uncertainties and trade wars will dominate."

In the U.S., crude oil stockpiles were expected to have risen last week, while distillate and gasoline inventories likely fell, a preliminary Reuters poll showed on Monday.

The poll was conducted ahead of weekly reports from industry group the American Petroleum Institute, due at 4:30 p.m. EDT (2030 GMT) later on Tuesday, and the Energy Information Administration, the statistical arm of the U.S. Department of Energy, at 10:30 a.m. EDT (1430 GMT) on Wednesday.

A key economic adviser to President Donald Trump on Monday pushed back on talk of recession stemming from uncertainty around his administration's tariff policies, even as a survey of American households showed consumers growing more pessimistic about their prospects, and U.S. stocks plunged.

In an interview with CNBC, Kevin Hassett, who heads the National Economic Council, said there were many reasons to be optimistic about the U.S. economy, despite some predictions of a contraction in gross domestic product in the first quarter and concerns about inflation.

Trump's tariffs on Canada, China and Mexico were already having the intended effect of bringing manufacturing and jobs back to the United States, he said.

"There are a lot of reasons to be extremely bullish about the economy going forward. But for sure, this quarter, there are some blips in the data," Hassett said, saying those stemmed from both timing effects of Trump's rapid-fire tariffs push and some of what he called the "Biden inheritance."

Trump and his team have repeatedly bashed the economy that they inherited from Democrat Joe Biden. But when Trump took office in January, GDP growth had largely exceeded trend for two years, consumer spending was strong and unemployment was still near historic lows.

A line chart showing the price of the S&P 500 benchmark stock index under President Trump and President Biden

Several recent indicators, though, have pointed to a softening trend, and the New York Fed's monthly Survey of Consumer Expectations out on Monday concluded: "Households expressed more pessimism about their year-ahead financial situations in February, while unemployment, delinquency, and credit access expectations deteriorated notably."

The percentage of households expecting the jobless rate to be higher a year from now rose to its highest since September 2023.

Meanwhile, the Atlanta Federal Reserve's closely followed GDPNow tracker suggests the economy could contract in the first three months of the year, largely due to an outsized drag from net trade.

Hassett said that would be a "very temporary phenomenon," driven largely by a historical tendency to hold off on investment after a big election. This tendency should be resolved this month, and tariff uncertainty should be resolved in April, he said.

Trump himself in a Fox News interview aired over the weekend declined to predict whether his economic policies - centered so far on a blitz of tariff announcements, some of which have taken effect and others delayed or set to kick in later - would cause a recession.

U.S. stock markets, already in retreat amid concern about his erratic decision-making on tariffs that most economists see as slowing activity and stoking inflation, on Monday were suffering their largest drop since Trump took office. The S&P 500, which hit a record high in mid-February, was down 2.7% and Nasdaq was off by 4%. Both were at their lowest since September.

Item 1 of 3 The White House is seen behind a stop sign in Washington, U.S., January 10, 2021. REUTERS/Joshua Roberts/File Photo

[1/3]The White House is seen behind a stop sign in Washington, U.S., January 10, 2021. REUTERS/Joshua Roberts/File Photo Purchase Licensing Rights, opens new tab

"Trump was seen as the market’s savior, promising lower taxes and less stringent regulation. Now, his actions represent the harbinger of doom," said Dan Coatsworth, investment analyst at AJ Bell in London. "The 'R' word is back on everyone’s lips as people ponder if trade tariffs will backfire and lead to recession rather than U.S. economic prosperity."

The S&P 1500 Supercomposite Index, one of the widest measures of the U.S. stock market, has lost nearly $4.9 trillion in value since its record high in mid-February.

Shows market loss

'ADVERSE TARIFF ASSUMPTIONS'

Reuters polls of economists last week showed risks to the Mexican, Canadian, and American economies are piling up amid a chaotic implementation of U.S. tariffs that have created deep uncertainties for businesses and decision-makers. The surveys showed that 70 of 74 economists polled across Canada, the U.S., and Mexico judged that the risk of a recession had increased, and upside risks to inflation in the U.S. rose in particular.

Economists at Goldman Sachs have cut their 2025 U.S. growth forecast and raised their inflation forecast, "both on the back of more adverse tariff assumptions." They said their growth estimate was now below the consensus figure for the first time in two-and-a-half years.

Trump has imposed an additional 20% tariff on Chinese goods entering the United States, as well as 25% tariffs on imports from Canada and Mexico, although he suspended most of the duties on U.S. neighbors until April 2, when he plans to unveil a global regime of reciprocal tariffs on all trading partners.

Hassett struck an upbeat note, arguing U.S. tax cuts would boost the economy, increase investment, and boost real wages by the second quarter, offsetting any negative fallout from the tariffs.

"Just be very wary ... of conversations about recession," he said. "What I think that what's going to happen is the first quarter is going to squeak into the positive category, and then the second quarter is going to take off as everybody sees the reality of the tax cuts," he said.

Austin Ramirez, president and CEO of hydraulic equipment maker Husco, based in Waukesha, Wisconsin, was among those who welcomed Trump’s campaign pledges to push through tax and regulatory reforms.

Those things are good for his business, Ramirez said, while tariffs and the threat of tariffs are negative for his business.

“Now,” he said, “the worry is that it’s all the bad stuff happening, and none of the good stuff.”

Hedge funds unwound positions in single stocks on Friday at the largest amount in over two years, with some activity comparable to March 2020, when portfolio managers cut market exposure during the pandemic, Goldman Sachs said in a note on Monday.

U.S. major stock indexes plummeted on Monday, with the Nasdaq (.IXIC), opening new tab down 4%, amid fears that President Donald Trump's tariff policy will drive the world's largest economy into a recession.

“It was a classic de-leveraging crunch,” said James Koutoulas, CEO at hedge fund Typhon Capital Management.

Goldman Sachs detailed that hedge funds' sale of single-name stocks was the biggest in over two years. It added some hedge funds' large de-risking moves in concentrated trades could be compared to what was seen in March 2020. It also cited January 2021, when hedge funds covered short positions in so-called meme stocks, popular among retail investors.

The Wall St. entrance to the New York Stock Exchange (NYSE) is seen in the financial district in New York, U.S., November 24, 2020. REUTERS/Brendan McDermid Purchase Licensing Rights opens new tab

Hedge funds' unwinding comes when leverage in the industry is at a record level. A separate Goldman Sachs note showed that the overall leverage of hedge funds in equity positions was 2.9 times their books, a record level over the last five years.

Some investors told Reuters they were concerned that some high-leverage hedge funds could keep de-risking in the coming days, impeding a potential market recovery.

Hedge funds unwound long and short positions that Goldman Sachs said were crowded, or common among many investors.

Goldman Sachs saw a risk-off trend in 10 of the 11 global sectors, mainly in industrials. The risk-off trend was seen across all regions, but mainly in the U.S.

On Monday morning, before the major indexes dipped even further, equities long/short hedge funds were down 1.5%, while systematic managers were down 0.3%, according to the bank.