Investors flee equities as Trump-driven uncertainty sparks economic worry

Lewis Krauskopf

Mon, Mar 10, 2025, 10:21 AM 4 min read

By Lewis Krauskopf

NEW YORK (Reuters) - Fears that uncertainty implicit commercialized tariffs volition spark an economical downturn are causing investors to fly equities, successful a large displacement for Wall Street which had been fired-up by the imaginable of President Donald Trump's agenda.

Stocks continued their steep diminution connected Monday, with the benchmark S&P 500 down 2% successful mid-day commercialized and the Nasdaq Composite sliding much than 3%. The S&P 500 was down astir 8% from its February 19 all-time high, nearing a 10% diminution that would amusement a correction for the index. The tech-heavy Nasdaq ended down much than 10% from its December precocious past week.

The S&P 500 tallied back-to-back gains of implicit 20% successful 2023 and 2024, led by megacap exertion and tech-related stocks specified arsenic Nvidia and Tesla that person struggled truthful acold successful 2025 and dragged large indexes down with them.

"We've seen intelligibly a large sentiment shift," said Ayako Yoshioka, elder concern strategist astatine Wealth Enhancement.

"A batch of what has worked is not moving now."

Investors are grappling with a barrage of caller policies from the caller Trump administration, peculiarly successful commercialized wherever backmost and distant connected tariff argumentation has accrued uncertainty for businesses, consumers and investors.

Trump implicit the play declined to foretell whether the U.S. could look a recession amid banal marketplace concerns astir his tariff actions connected Mexico, Canada and China.

"The Trump medication seems a small much accepting of the thought that they're OK with the marketplace falling, and they're perchance adjacent OK with a recession successful bid to nonstop their broader goals," said Ross Mayfield, concern strategist astatine Baird. "I deliberation that's a large aftermath up telephone for Wall Street."

The S&P 500 has fixed up each of its gains since Trump's November 5 election, and is present down much than 2% successful that time. Investors had expressed optimism that Trump's expected pro-growth docket including taxation cuts and deregulation would payment stocks, but uncertainty implicit tariffs and different changes including national workforce cuts, person dampened sentiment.

INVESTOR UNEASE

"It was the overwhelming statement that everything was going to beryllium this large situation erstwhile President Trump came into office," said Michael O’Rourke, main marketplace strategist astatine JonesTrading.

"Every clip you person structural alteration you're going to person uncertainty and you're going to person friction," O'Rourke said. "It's understandable radical are starting to beryllium a small acrophobic and starting to instrumentality profits."