Why did the Nasdaq fall 4% on Monday?

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Nasdaq Plunged 4% on Monday Amid Recession Fears Driven by Trump's Trade Policies

The Nasdaq Composite Index experienced its sharpest decline since 2022, falling by 4.0 per cent on Monday. This significant drop was primarily attributed to escalating concerns that President Donald Trump's trade policies could lead the United States into an economic recession. These fears were amplified by Trump's refusal to dismiss the possibility of a US recession, coupled with ongoing trade disputes and the imposition of substantial tariffs on imports.
Escalating Trade Tensions and Tariff Impositions

President Trump's administration has implemented broad tariffs on goods from Canada, Mexico, and China since taking office, with a partial rollback for the latter two. A new wave of these protectionist measures, a 25 per cent levy on steel and aluminum imports, was slated to take effect on Wednesday, further increasing uncertainty in the market. This consistent imposition of tariffs and threats has created considerable turmoil within US financial markets, leaving businesses and consumers grappling with an unpredictable economic landscape.
Market Sentiment Overshadowed by Political Vision

Market observers noted a disconnect between the stock market's performance and the underlying economic realities for businesses. Kathleen Brooks, research director at XTB, suggested that President Trump appears to be prioritising his political objectives over the immediate economic well-being of the United States. This sentiment was echoed by concerns that the market's "animal spirits" were diverging from the actual experiences of businesses and their leaders, as described by a White House official.
Impact on Major Technology Stocks

The decline in the Nasdaq was significantly influenced by substantial retreats in the performance of major technology companies, often referred to as the "Magnificent Seven." This group includes prominent names such as Google's parent company, Alphabet, Apple, Amazon, Meta, and Nvidia. Notably, shares in Tesla experienced a particularly severe downturn, closing down by more than 15 per cent. This broad sell-off across key tech sectors underscored the widespread impact of the prevailing economic anxieties.

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Why did the Nasdaq fall 4% on Monday?

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