U.S. Stocks Plunge As Trump Warns Of Economic ‘Transition’ Period

 Stocks plummeted on Monday after President Donald Trump warned of a “period of transition” for the United States economy as a result of his tariff policies aimed at bringing manufacturing back to America.

All major indices tumbled on Monday, with the S&P 500 dropping 2.8%, the Dow Jones falling 2%, and the Nasdaq plunging more than 4%, per the AP.

The whiplash of news in recent weeks regarding tariffs has had the stock market in a state of confusion, as “the main measure of the U.S. stock market is on track for a seventh swing of more than 1%, up or down, in the last eight days,” per the AP.

Last week, Trump slapped 25% tariffs on imports from Mexico and Canada, only to instantly exempt the vast majority of imported goods just two days later following a call with the Mexican president. He also doubled a blanket tariff on goods from China to 20%.

China retaliated with new tariffs of 10% to 15% targeting United States farm products such as chicken and soybeans, per the BBC.

In response to Trump’s actions, Ontario Premier Doug Ford implemented a 25% surcharge on electricity exports to the United States, a move expected to impact 1.5 million homes and businesses across Minnesota, Michigan, and New York.

Economist Mohamed El-Erian told the BBC that markets likely underestimated how far Trump was willing to go with tariffs and are now facing that reality.

“There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America,” Trump told Fox News over the weekend when asked about recession concerns, adding, “It takes a little time.”

Former United States Commerce Department official Frank Lavin echoed this sentiment, telling the BBC that while he believes the trade war is unlikely to escalate out of control, tariffs will still create an “extra burden on the U.S. economy.”

Despite market turbulence, economists at Goldman Sachs still predict 1.7% economic growth by year’s end, though this represents a downward revision from earlier 2.2% forecasts.

The market decline has hit previous Wall Street favorites particularly hard, with Nvidia falling 5.4% today to bring its year-to-date loss to 20% and Elon Musk’s Tesla tumbling 14.2%, deepening its 2025 losses to more than 40%.