NEW YORK (Reuters) -Major U.S. stock indexes sank on Monday after U.S. President Donald Trump declined to predict whether his tariff policies could lead to a recession, roiling investor sentiment.
The Nasdaq Composite slumped more than 3% after confirming last week that it’s retreat from December’s record high was a correction. The S&P 500 slid 2%, down about 8% from its all-time high from February 19.
Below are investor and analyst comments about the selloff.
DAN COATSWORTH, INVESTMENT ANALYST, AJ BELL, LONDON
“The U.S. market sell-off is starting to look ugly. Many people have been worried about elevated valuations among U.S. equities for some time and looking for the catalyst for a market correction. A combination of concerns about a trade war, geopolitical tensions and an uncertain economic outlook could be that catalyst.”
“Trump was seen as the market’s savior, promising lower taxes and less stringent regulation. Now his actions represent the harbinger of doom. The R word is back on everyone’s lips as people ponder if trade tariffs will backfire and lead to recession rather than U.S. economic prosperity.”
“During his first term as U.S. president, Donald Trump often cited a rising stock market as being representative of his success. As such, he will not want to see a full-blown market crash months into his second term.”
MICHAEL O’ROURKE, CHIEF MARKET STRATEGIST, JONESTRADING, STAMFORD, CONNECTICUT
“There was so much expectation after the election – a lot of it misguided – but it was the overwhelming consensus that everything was going to be this great environment once President Trump came into office. What he’s trying to enact is structural change… And every time you have structural change you’re going to have uncertainty and you’re going to have friction. It’s understandable people are starting to be a little concerned and starting to take profits.
“Also, we’ve had this age of U.S. exceptionalism where the U.S. has massively outperformed… that’s also part of the backdrop that you could go invest in other places of the world with much lower multiples and maybe at least not be exposed to the expensive valuations of the U.S. while the U.S. pushes its structural shift.”
IDANNA APPIO, PORTFOLIO MANAGER, FIRST EAGLE INVESTMENT MANAGEMENT
“The broader pressure on U.S. assets, I think reflects a lot of increased uncertainty about U.S. policy. That uncertainty, just in general, is quite bad for businesses as they’re not sure how to invest, where to invest, so it becomes harder to make decisions.”
