Following a stock market sell-off, investors are raising questions on how much painthe economy must endure through tariffs and other policies in order to get what Trump wants.
After the stock market took its deepest dive of the year, which stocks are down, how close is the U.S. to a recession, and what time do markets open Tuesday?
Here’s a breakdown of where things stand.
Where markets closed Monday
Monday, the S&P 500 dropped 2.7%, closing 9% below its all-time high, which was set just last month. At one point, the S&P 500 was down 3.6% and on track for its worst day since 2022. That’s when the highest inflation in generations was shredding budgets and raising worries about a possible recession that ultimately never came.
The Dow dropped 2.1%, while the Nasdaq composite skidded 4%.
It was the worst day yet in a scary stretch where the S&P 500 has swung more than 1%, up or down, seven times in eight days because of Trump’s on -and- off -again tariffs. The worry is that the whipsaw moves will either hurt the economy directly or create enough uncertainty to drive U.S. companies and consumers into an economy-freezing paralysis.
The economy has already shown some signs of weakening, mostly through surveys showing increased pessimism. And 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.
A list of what time markets open Tuesday can be found here and here.
Which stocks are down?
The worries hitting Wall Street have so far been hurting some of its biggest stars the most. Big Tech stocks and companies that rode the artificial-intelligence frenzy in recent years have slumped sharply.
Nvidia fell another 5.1% Monday to bring its loss for the year so far to more than 20%. It’s a steep drop-off from its nearly 820% surge over 2023 and 2024.
Elon Musk’s Tesla fell 15.4% to deepen its loss for 2025 to 45%. After getting an initial post-election bump on hopes that Musk’s close relationship with Trump would help the electric-vehicle company, the stock has slumped on worries that its brand has become intertwined with Musk. Protests against the U.S. government’s efforts to cull its workforce and other moves have targeted Tesla dealerships, for example.
In energy trading, benchmark U.S. crude oil rose 24 cents to $66.27 a barrel. Brent crude, the international standard, rose 32 cents to $69.60 a barrel.
In currency trading, the U.S. dollar rose to 147.29 Japanese yen from 147.14 yen. The euro cost $1.0916, up from $1.0834.
On Monday:
The S&P 500 fell 155.64 points, or 2.7%, to 5,614.56.
The Dow Jones Industrial Average fell 890.01 points, or 2.1%, to 41,911.71.
The Nasdaq composite fell 727.90 points, or 4%, to 17,468.32.
The Russell 2000 index of smaller companies fell 56.42 points, or 2.7%, to 2,019.07.
For the year:
The S&P 500 is down 267.07 points, or 4.5%.
The Dow is down 632.51 points, or 1.5%.
The Nasdaq is down 1,842.47 points, or 9.5%.
The Russell 2000 is down 211.09 points, or 9.5%.
Is the U.S. at risk of a recession?
Asked over the weekend whether he was expecting a recession in 2025, Trump told Fox News Channel: “I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing.” He then added, “It takes a little time. It takes a little time.”
Tariffs from China on U.S. agricultural products went into effect Monday. Canada also instituted 25% increases on electricity exports to the U.S. in response to Trump tariffs.
The Federal Reserve Bank of Atlanta’s GDPNow tool is currently projecting that the GDP in the first quarter may decline by 2.4%, the first quarterly contraction seen in the U.S. since 2022.
What is a recession and what could it mean for you? Here’s what to know
According to CNN, a combination of increasing layoffs, an uptick in inflation and rising consumer prices could be indicators of an economic downturn, but quotes economists as saying the current situation could simply be a “cooling” of private sector activity.
Sam Stovall, chief investment strategies at CFRA Research, told CNBC the current situation is a reaction to the Trump administration’s tariff policies.
“We are in the throes of a manufactured correction,” he said. “I say manufactured because it’s really based in response to the new administration’s tariff programs, or at least threats of tariffs, and what kind of an impact that will have on the economy.”
Stovall did say that there is a possibility the recent market downturns are part of a “typical pullback,” and that there could be a “resetting of the dials” after recent records set on the stock exchanges.
What is a recession?
A recession can be defined as a “significant downturn in economic activity reflected in a decline in the growth of gross domestic product,” according to Mercer University. Dr. Antonio Saravia says the “conventional definition” of a recession is when there is negative growth in the GDP in two consecutive quarters.
Unemployment rates and payroll data can also be used to determine the start and end dates of a recession, according to economists.
The National Bureau of Economic Research also holds that significant declines in economic activity must be evaluated on their depth, diffusion and duration.
When was the last time the U.S. was in a recession?
The last recession the U.S. experienced, according to the NBER, occurred during the early days of the COVID pandemic in 2020, when millions of Americans were forced out of work and large-scale shutdowns took place.
That recession was short-lived, only lasting a matter of months. The federal government responded to the pandemic with a massive infusion of money into the economy, which helped contribute to post-pandemic inflation, according to economists.
Prior to the pandemic, the last recession the U.S. experienced occurred between 2007 and 2009, and is now known as the “Great Recession,” the most significant economic downturn since the Great Depression.
A massive collapse of the U.S. housing market helped fuel the recession, with a slew of major banks forced to seek out huge government bailouts to help stay afloat during the crisis, according to Britannica.