United States, Mar 11 (V7N) – U.S. stocks dropped sharply on Monday, with the Nasdaq and the S&P 500 experiencing their largest single-day declines since September 2022. This drop comes amid growing concerns of a potential recession this year, after President Donald Trump hinted that it could be a possibility.

In an interview on Fox News, Trump was asked about the likelihood of a recession. He declined to predict, saying, "I hate to predict things like that... there is a period of transition because what we’re doing is very big."

Both the S&P 500 and Nasdaq fell to their lowest levels since September 2024. The Nasdaq fell further into "correction" territory, which is defined as a drop of at least 10% from its most recent high in December 2024.

The S&P 500 dropped 2.70%, or 155.64 points, closing at 5,614.56. The Dow Jones Industrial Average lost 2.08%, or 890.01 points, finishing at 41,911.71. The Nasdaq fell 4%, or 727.90 points, ending at 17,468.32. The 10-year Treasury yield decreased to 4.225%.

Trump's comments reflect similar statements made by Treasury Secretary Scott Bessent on CNBC last Friday, suggesting a "detox period" for the economy as the government cuts spending. These remarks coincide with investor concerns over fluctuating trade policies between the U.S., Mexico, Canada, and China, which could affect consumer demand and corporate investments.

Andrew Harker, economics director at S&P Global Market Intelligence, noted that businesses are becoming more cautious about hiring and investments due to uncertainties in global trade and geopolitics. "Projections for employment and capital expenditure have been scaled back, reflecting a more cautious approach," he said.

Additionally, tariffs between the U.S. and China continue to escalate. China’s retaliatory tariffs on some U.S. goods began on Monday, while U.S. tariffs on certain metals are expected to take effect later in the week.

Chris Larkin, managing director at E*TRADE from Morgan Stanley, explained that while various market forces are at play, "right now, almost all of them are taking a back seat to tariffs."

Despite the rapid decline in the stock market, Principal Asset Management urged investors to keep things in perspective. "Markets tend to respond quickly, but the economic impact of tariffs usually takes time to unfold," the firm noted.

A busy week of economic reports could add more uncertainty to the market. Data on inflation and consumer sentiment are expected this week, which could influence the direction of the sell-off. "If inflation comes in softer than expected, it could help stabilize equity markets," said BeiChen Lin, senior investment strategist at Russell Investments. "However, if inflation is higher than anticipated, it could continue to drive the market down."

Meanwhile, Bitcoin prices continue to fluctuate, dropping 2.31% to $78,945.61, staying below the key $80,000 level. Analysts say that despite positive developments for cryptocurrencies, such as Trump's strategic reserve and growing interest from major investment firms, Bitcoin remains vulnerable to broader market uncertainties.

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