A sharp sell-off in the US stock market has raised concerns that a recession may be ahead. The Dow Jones Industrial Average plummeted nearly 900 points, while the S&P 500 fell 2.7% and the Nasdaq dropped 4%, its steepest fall in two-and-a-half years.
The sell-off was fueled by comments from President Trump, who played down the impact of his tariff threats on Canada and Mexico. His comments sparked fears that he will abandon the US stock market to pursue his “America First” agenda.
Analysts warn that Trump’s trade policies threaten to disrupt efforts to achieve a soft landing for the US economy. Goldman Sachs has cut its 2025 growth forecast for the US economy to 1.7%, down from 2.4%. The investment bank also raised its inflation forecast to 3%.
Other experts point to the prospect of a recession as a looming threat. Susannah Streeter, head of money and markets at Hargreaves Lansdown, warned that consumer confidence is falling, companies are facing increasing trade complexity, and investors are growing nervous.
The US economy is also threatened by the prospect of a partial government shutdown, which could occur if new funding can’t be finalized before Friday. The last government shutdown lasted over 35 days in late 2018 and early 2019.
As the market struggles to find direction, one thing is clear: the US stock market sell-off has raised significant concerns about the state of the economy ahead.
Source: https://www.dw.com/en/stock-market-sell-off-is-a-us-recession-ahead/a-71884595