The S&P 500 ended yesterday’s trading session down nearly 2.3%, weighed down by significant losses from Tesla and other top technology firms.
The prolonged downward trend is believed to stem from U.S. President Donald Trump’s refusal to predict whether his tariff policies could lead to an economic recession.
Meanwhile, concerns over “stagflation” have further unsettled investor sentiment.
The market is currently experiencing stagflation—a combination of high inflation and slowing economic growth—which is eroding investor confidence.
Recent economic data shows that consumer prices continue to rise, while GDP growth has shown signs of stagnation.
This has sparked fears that the economy could enter a prolonged recession if appropriate support measures are not implemented.
As a result, the stock market remains in a downward trend, with the S&P 500 losing more than 8% since its peak on February 19.
The ongoing U.S.-China trade tensions are further exacerbating the situation. Tough tariff policies from both sides are negatively impacting global supply chains and increasing production costs, adding more pressure on businesses and financial markets.
Without signs of improvement in trade negotiations, the economy may face even greater risks.
Amid this backdrop, in a March 9 interview, when asked whether his tariff policies could push the economy into a recession, President Trump declined to provide a clear answer. He stated: “I hate making predictions like that. The economy is going through a transition because my administration is doing very important work.”
Trump’s reluctance to rule out a potential economic downturn has further worried investors, triggering a market sell-off, particularly in technology and consumer stocks. Contributing to yesterday’s losses in the S&P 500 was Tesla’s sharp decline of over 15%, while other tech giants such as Nvidia, Alphabet, and Meta also plunged nearly 5%.
This week, the market will closely monitor Wednesday’s meeting between U.S. and Ukrainian officials, which is expected to influence geopolitical uncertainty. Additionally, the upcoming Consumer Price Index (CPI) data release is drawing significant attention, as it will be a key indicator in determining whether inflationary pressures persist.
If geopolitical risks ease or inflation shows signs of significant improvement, the S&P 500 could see a short-term rebound. Conversely, the current panic may extend the market’s downward trajectory.