White House downplays economic ‘blips’ as stock market tumbles. The sell-off comes amid economic uncertainty and after President Donald Trump declined to rule out the possibility of a recession.
White House downplays economic ‘blips’ as stock market tumbles.
The sell-off comes amid economic uncertainty and after President Donald Trump declined to rule out the possibility of a recession.
8 minutes ago
Traders work on the floor of the New York Stock Exchange on March 7. (Charly Triballeau/AFP/Getty Images)
By Jeff Stein, Shannon Najmabadi and Aaron Gregg
President Donald Trump’s senior advisers downplayed fresh economic turbulence Monday as the administration’s escalating trade war deepened a sell-off on Wall Street and renewed fears about the stability of the U.S. economy.
As all three major U.S. stock indexes slumped, Trump’s team projected confidence that the volatility would prove temporary and that an economic boom set off by tax cuts would follow later this year. But investors have been unsettled by Trump’s willingness to impose tariffs that go even beyond his sweeping campaign promises, with hundreds of billions in new import duties already levied and trillions more poised to take effect on April 2. The federal government could shut down this weekend, too, if Congress doesn’t extend federal funding — a possibility Trump acknowledged to reporters on Sunday night.
The growing conviction that Trump will stick by massive new tariffs regardless of the economic fallout — amplified by the president’s refusal to rule out a recession on Sunday — fueled the drop across equity markets. The Dow Jones Industrial Average closed down 890 points, or 2.1 percent, while the S&P 500 fell 2.7 percent and the Nasdaq Composite plummeted 4.0 percent.
“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,” White House National Economic Council Director Kevin Hassett told CNBC on Monday. “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.”
Hassett’s comments appeared not to immediately persuade investors who have grown increasingly skittish about the impact of Trump’s tariff policies in his first weeks in office. The president last week implemented 25 percent duties on all imports from Canada and Mexico — the nation’s two biggest trading partners — before paring back those plans so they don’t affect goods imported under the North America trade pact reached during Trump’s first term. Trump added another 10 percent to tariffs on all Chinese products last week, bringing the total tax on some imports from China to 45 percent.
Goldman Sachs and JPMorgan Chase last week both downgraded their forecasts for first-quarter economic growth, citing tariffs and broader uncertainty surrounding the Trump’s administration’s economic policies.
BNP Paribas said it anticipates “lasting damage to global economic activity” even if the recently imposed tariffs are removed, with substantially greater damage to be priced into the market the longer tariffs stay in effect.
Worries among Americans that their household financial situations would deteriorate rose considerably in February to the highest level since November 2023, according to a Federal Reserve Bank of New York report out Monday.
“What’s happening is very straightforward: Tariffs are what is causing the sell-offs across markets, and the risk of a slower pace of growth in the U.S. economy,” said Joe Brusuelas, chief economist at tax and consulting firm RSM US.
During Trump’s first term, his administration repeatedly backed off new tariffs when they led to a decline in the stock market. But the president has gone out of his way in recent days to suggest that will not be the case in his second term. He said Thursday that he is not looking at the stock market, and said in an interview broadcast Sunday that it will take “a little time” before Americans see a payoff from his policies.
Trump also declined to rule out a recession.
“I hate to predict things like that,” Trump said. “There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America.
It was the second time the White House imposed stiff tariffs only to quickly reverse course, leading to wild ups and downs on Wall Street. Last week, the S&P 500 and Nasdaq tumbled 3 percent and 3.4 percent, respectively, while the Dow dropped 2.3 percent.
Uncertainty in the market extended to the tech sector, where growth-oriented stocks linked to artificial intelligence and chips could see a shake-up as the Trump administration imposes harsh new duties on China, said Wedbush senior analyst Dan Ives. Apple closed down nearly 4.9 percent on Monday, while Nvidia lost 5.1 percent.
“The Street can’t take not knowing the rules of the game under Trump with recession fears growing, and this is causing a mini panic for tech investors,” Ives said in an email.
Tech stocks’ historically strong performance — particularly among a handful of top-performing “Magnificent Seven” stocks that includes Apple and Nvidia — has led market growth in recent years.
The recent sell-off might reflect investors’ desire to “lock in gains” in those areas, and a retrenchment from the more speculative, future-growth stocks on the Nasdaq toward more stable offerings, like utilities, said Mark Mahaney, managing director and the head of the internet research at Evercore.
In a sign of the increased turmoil, the Cboe volatility index, known as Wall Street’s “fear gauge,” jumped 19.5 percent by the end of the trading day. Investors will be closely watching the inflation report coming Wednesday, analysts said.
Jeff Stein is the White House economics reporter for The Washington Post. He was a crime reporter for the Syracuse Post-Standard and, in 2014, founded the local news nonprofit the Ithaca Voice in Upstate New York. He was also a reporter for Vox.
Shannon Najmabadi is a reporter covering business news. Before joining The Washington Post in 2024, she covered national news for The Wall Street Journal.
Aaron Gregg is a business reporter for the Washington Post.
White House downplays economic ‘blips’ as stock market tumbles. The sell-off comes amid economic uncertainty and after President Donald Trump declined to rule out the possibility of a recession.
White House downplays economic ‘blips’ as stock market tumbles.
The sell-off comes amid economic uncertainty and after President Donald Trump declined to rule out the possibility of a recession.
8 minutes ago
Traders work on the floor of the New York Stock Exchange on March 7. (Charly Triballeau/AFP/Getty Images)
By Jeff Stein, Shannon Najmabadi and Aaron Gregg
President Donald Trump’s senior advisers downplayed fresh economic turbulence Monday as the administration’s escalating trade war deepened a sell-off on Wall Street and renewed fears about the stability of the U.S. economy.
As all three major U.S. stock indexes slumped, Trump’s team projected confidence that the volatility would prove temporary and that an economic boom set off by tax cuts would follow later this year. But investors have been unsettled by Trump’s willingness to impose tariffs that go even beyond his sweeping campaign promises, with hundreds of billions in new import duties already levied and trillions more poised to take effect on April 2. The federal government could shut down this weekend, too, if Congress doesn’t extend federal funding — a possibility Trump acknowledged to reporters on Sunday night.
The growing conviction that Trump will stick by massive new tariffs regardless of the economic fallout — amplified by the president’s refusal to rule out a recession on Sunday — fueled the drop across equity markets. The Dow Jones Industrial Average closed down 890 points, or 2.1 percent, while the S&P 500 fell 2.7 percent and the Nasdaq Composite plummeted 4.0 percent.
“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,” White House National Economic Council Director Kevin Hassett told CNBC on Monday. “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.”
Hassett’s comments appeared not to immediately persuade investors who have grown increasingly skittish about the impact of Trump’s tariff policies in his first weeks in office. The president last week implemented 25 percent duties on all imports from Canada and Mexico — the nation’s two biggest trading partners — before paring back those plans so they don’t affect goods imported under the North America trade pact reached during Trump’s first term. Trump added another 10 percent to tariffs on all Chinese products last week, bringing the total tax on some imports from China to 45 percent.
Goldman Sachs and JPMorgan Chase last week both downgraded their forecasts for first-quarter economic growth, citing tariffs and broader uncertainty surrounding the Trump’s administration’s economic policies.
BNP Paribas said it anticipates “lasting damage to global economic activity” even if the recently imposed tariffs are removed, with substantially greater damage to be priced into the market the longer tariffs stay in effect.
Worries among Americans that their household financial situations would deteriorate rose considerably in February to the highest level since November 2023, according to a Federal Reserve Bank of New York report out Monday.
“What’s happening is very straightforward: Tariffs are what is causing the sell-offs across markets, and the risk of a slower pace of growth in the U.S. economy,” said Joe Brusuelas, chief economist at tax and consulting firm RSM US.
During Trump’s first term, his administration repeatedly backed off new tariffs when they led to a decline in the stock market. But the president has gone out of his way in recent days to suggest that will not be the case in his second term. He said Thursday that he is not looking at the stock market, and said in an interview broadcast Sunday that it will take “a little time” before Americans see a payoff from his policies.
Trump also declined to rule out a recession.
“I hate to predict things like that,” Trump said. “There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America.
It was the second time the White House imposed stiff tariffs only to quickly reverse course, leading to wild ups and downs on Wall Street. Last week, the S&P 500 and Nasdaq tumbled 3 percent and 3.4 percent, respectively, while the Dow dropped 2.3 percent.
Uncertainty in the market extended to the tech sector, where growth-oriented stocks linked to artificial intelligence and chips could see a shake-up as the Trump administration imposes harsh new duties on China, said Wedbush senior analyst Dan Ives. Apple closed down nearly 4.9 percent on Monday, while Nvidia lost 5.1 percent.
“The Street can’t take not knowing the rules of the game under Trump with recession fears growing, and this is causing a mini panic for tech investors,” Ives said in an email.
Tech stocks’ historically strong performance — particularly among a handful of top-performing “Magnificent Seven” stocks that includes Apple and Nvidia — has led market growth in recent years.
The recent sell-off might reflect investors’ desire to “lock in gains” in those areas, and a retrenchment from the more speculative, future-growth stocks on the Nasdaq toward more stable offerings, like utilities, said Mark Mahaney, managing director and the head of the internet research at Evercore.
In a sign of the increased turmoil, the Cboe volatility index, known as Wall Street’s “fear gauge,” jumped 19.5 percent by the end of the trading day. Investors will be closely watching the inflation report coming Wednesday, analysts said.
Jeff Stein is the White House economics reporter for The Washington Post. He was a crime reporter for the Syracuse Post-Standard and, in 2014, founded the local news nonprofit the Ithaca Voice in Upstate New York. He was also a reporter for Vox.
Shannon Najmabadi is a reporter covering business news. Before joining The Washington Post in 2024, she covered national news for The Wall Street Journal.
Aaron Gregg is a business reporter for the Washington Post.