U.S. stock markets tumbled on Monday as investors reacted to growing concerns over the economic impact of President Donald Trump’s tariff policies. His recent remarks about the economy being in a “period of transition” raised fears of a slowdown, triggering a widespread sell-off.

The S&P 500 dropped 2.7%, while the Dow Jones Industrial Average fell 2%. The tech-heavy Nasdaq was hit the hardest, plunging 4% as major technology stocks took a sharp downturn. Tesla shares collapsed by 15.4%, while Nvidia, Meta, Amazon, and Alphabet all suffered significant losses.

Asian markets followed suit on Tuesday, opening sharply lower before stabilizing. Japan’s Nikkei 225 closed down 0.6%, while South Korea’s Kospi dropped 1.3%. The sell-off reflected global investor concerns about the potential ripple effects of Trump’s trade policies.

Trump’s unpredictability on tariffs has kept investors on edge. “He’s keeping political leaders guessing, but he’s also keeping investors guessing, and that’s reflected in the dire market mood,” said Tim Waterer, chief market analyst at KCM Trade. Market uncertainty has been compounded by fears of an economic slowdown and a shift in investor sentiment toward more defensive strategies.

Tesla’s massive decline was partly attributed to falling demand in Europe and China, as well as increasing competition from Chinese electric vehicle manufacturers. “The drop comes down to hard numbers,” said investment strategist Lindsay James of Quilter Investors. “New orders have halved over the past year, and investors are getting more worried about an economic slowdown.”

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Beyond the auto industry, tech stocks broadly suffered as investors reassessed valuations amid concerns about slowing growth. Artificial intelligence chip giant Nvidia lost over 5%, and other tech giants saw their stock prices fall as well. Analysts noted that high valuations and uncertainty over future earnings contributed to the sell-off.

Meanwhile, the White House sought to downplay market fears, arguing that business confidence remained strong. A White House official stated that there was a “strong divergence between the animal spirits of the stock market and what we’re actually seeing unfold from businesses and business leaders.” The official emphasized that the administration remained focused on long-term economic growth.

In a separate statement, White House spokesman Kush Desai highlighted the positive response from industry leaders, citing “trillions in investment commitments” as a sign of confidence in Trump’s economic agenda. Despite these assurances, markets continued to show signs of caution.

The downturn comes after U.S. stocks recently erased gains made since Trump’s election victory. Initially, investors had welcomed his administration due to expectations of tax cuts and deregulation. However, the ongoing trade disputes with China, Mexico, and Canada have created new concerns about economic growth and inflation.

With fears of a recession looming, investors are now bracing for more market volatility. While some analysts believe the market is undergoing a necessary correction, others warn that prolonged uncertainty over trade policies could lead to further declines. As the situation unfolds, investors will be watching closely for any new policy announcements or economic data that could shift market sentiment.

Reported by BBC News.