Three Days of Stock Market Decline Mark Progress Toward Recession
Stocks are reading red on Tuesday, continuing the downward streak started by President Donald Trump’s newly released tariffs that bring steep fees for close trading partners.
The stock decline we have seen over the last few days has been the biggest equity loss since Covid-19. There were slight increases from all three major stock indices, but these follow days of decline, and it is expected that even with the small bounce back, the market will continue to drop.
Between Thursday and Friday, the S&P 500 lost 10% while the Dow Jones fell about 1,500 points. That is a first for this market index. The Nasdaq Composite did not fare much better, losing about 6% in that period.
Monday continued the decline even further, with losses all around, but we are seeing some slight improvement for Tuesday in premarket trading. The market is in a state of severe volatility, and there are concerns that recession is not too far away. The last recession reading showed no solid indicators for recession in the United States, but that was before Trump announced new, stepper tariffs that have already stirred up other countries to fire back with retaliatory tariffs of their own.
A Bearish Market That Could Keep Falling
Monday’s train numbers marked an entrance into bearish territory for the indexes, with consecutive days of decline that have broken records and caused tremendous worry among investors and economists.
The chief economist at Global Wealth Management, Paul Donovan, says that recession risks are on the rise. The stock market is not indicative of the entire economy, but as it falls, the wider economy is impacted negatively.
Investment bank and financial service UBS released a statement from their chief economist Daniel Kalt. He said that before the market gets better, it could get much worse. Like other economists and investors, he is expecting to see further market decline that brings the United States very close to recession territory. Kalt says that it is not appropriate to use the word “crash,” but the declining economy and stock market are big news.
Investors should keep these developments in mind and realize that major economists are warning that the situation could worsen if changes are not made to right the ship. Trump’s advisors are likely giving him similar warnings, but he famously plays by his own rules and could drive the U.S. into a recession in the near future.
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