Stocks tumbled on Monday as mounting concerns over US trade policies and economic uncertainty triggered a broad-based sell-off. The Dow Jones Industrial Average suffered a sharp decline, while the Nasdaq posted its worst session since 2022, led by a steep drop in technology stocks. The S&P 500 also fell significantly, retreating to levels not seen since September. Investors moved away from high-growth names and into defensive plays amid growing fears that tariff-related disruptions could push the economy toward a downturn. Comments from the Trump administration over the weekend, coupled with a downgraded growth outlook, added to investor anxiety. Treasury yields dropped as traders sought safe-haven assets, while volatility surged to its highest level in months.

Key Takeaways:

  • Dow Sinks Nearly 900 Points, Worst Session Since Early 2025: The Dow Jones Industrial Average plummeted 890.01 points, or 2.08%, to close at 41,911.71. The Dow is now nearly 8.7% below its all-time high from February 19, as recession concerns and weaker economic forecasts weigh on sentiment.
  • S&P 500 Tumbles 2.7%, Hits Lowest Since September: The S&P 500 fell 2.7%, closing at 5,614.56 after touching its lowest intraday level since September. The index has now lost 8.7% from its February peak, bringing it closer to correction territory. 
  • Nasdaq Suffers Worst Day Since 2022 as Tech Stocks Crumble: The tech-heavy Nasdaq Composite saw the most severe losses among the major indices, dropping 4% to settle at 17,468.32. This marks its worst single-day decline since September 2022 and extends its losses to nearly 14% from its recent high. 
  • European Markets End Lower as Tech Sector Leads Losses: European markets followed Wall Street’s lead, with the pan-European Stoxx 600 falling 1.4% as investors digested the potential impact of US tariffs on the global economy. The FTSE 100 Index dropped 79.66 points, or 0.92%, to close at 8,600.22, while France’s CAC 40 shed 77 points, or 0.95%. Germany’s DAX posted the steepest decline among major European indices, dropping 388 points, or 1.69%, as uncertainty weighed on investor sentiment. The FTSE MIB Index dropped 367 points or 0.95%. European tech stocks were hit hardest, falling 3.1% after their US counterparts slumped. Meanwhile, EUR/USD closed flat, having reached an intraday high of 1.0874.
  • Asia-Pacific Markets Trade Mixed After Volatile Week: Asian markets saw a mixed session amid ongoing uncertainty surrounding US trade policies. Japan’s Nikkei 225 managed to rise 0.38% to 37,028, though the broader Topix index slipped 0.29% to 2,700. South Korea’s Kospi added 0.27% to 2,570, while the small-cap Kosdaq fell 0.26% to 725. Meanwhile, Australia’s S&P/ASX 200 edged up 0.18% to 7,962 after reaching a six-month high in its prior session. In China, sentiment remained weak, with the CSI 300 declining 0.39% to 3,928.80, while Hong Kong’s Hang Seng Index dropped 1.83%.
  • Treasury Yields Drop as Investors Seek Safe Havens: US government bonds rallied as investors fled to safety amid growing recession fears. The benchmark 10-year Treasury yield dropped 9 basis points to 4.226%, while the 2-year yield fell nearly 10 basis points to 3.906%. 
  • Volatility Index Surges to Highest Since December: The Cboe Volatility Index (VIX), often referred to as Wall Street’s “fear gauge,” spiked 19.22% to 27.86, its highest level since December. The sharp rise in volatility reflects increased anxiety among investors as economic uncertainty deepens.
  • Oil Prices Drop Over 1% as Market Grapples with Tariff Uncertainty: Oil prices declined on Monday as uncertainty surrounding US tariffs and rising output from OPEC+ pressured the market. Brent crude fell $1.19, or 1.69%, to $69.17 per barrel, while West Texas Intermediate (WTI) crude slipped $1.12, or 1.67%, to $65.92 per barrel. WTI is now on a seven-week losing streak, the longest since November 2023, while Brent crude has fallen for 3 consecutive weeks. 

FX Today:

  • GBP/USD Slips Below 1.2900 as Uptrend Stalls: The British pound lost ground against the US dollar on Monday, with GBP/USD declining 0.28% to settle at 1.2876. After starting the session at 1.2915, the pair briefly touched a high of 1.2946 before facing selling pressure that dragged it to an intraday low of 1.2861. Despite recent strength, the failure to hold above 1.2900 raises concerns about further downside risks. The pair remains above key moving averages, with the 50-day SMA at 1.2504 and the 200-day SMA at 1.2791, suggesting the broader trend is still intact. A break below 1.2850 could accelerate losses toward 1.2800, while resistance remains at 1.2950.
  • USD/JPY Declines as Bearish Momentum Builds: The Japanese yen strengthened against the US dollar, with USD/JPY sliding 0.51% to close at 147.27. The pair struggled to hold gains, opening at 147.94 before dipping to a session low of 146.62. Persistent risk aversion fuelled demand for safe-haven assets, weighing on the dollar. Technical indicators show the pair remains in a downtrend, with the 50-day SMA at 153.55 and the 100-day SMA at 153.40 acting as key resistance levels. Further declines could push USD/JPY toward 146.50, with the next major support at 145.50. 
  • AUD/USD Extends Losses as Sellers Dominate: The Australian dollar struggled to gain traction on Monday, with AUD/USD falling 0.36% to 0.6282. The pair opened at 0.6303 and briefly tested resistance at 0.6330 before reversing lower, hitting an intraday low of 0.6264. Weak risk sentiment and lingering uncertainty over global trade weighed on the Aussie, keeping it below key moving averages. The 50-day SMA at 0.6261 provided initial support, but continued downside pressure could see a test of 0.6250, with 0.6200 as the next major level. A move above 0.6330 is needed to shift momentum, though resistance at 0.6370 remains a key hurdle for any recovery.
  • USD/CAD Strengthens as Canadian Dollar Slides: The Canadian dollar extended its recent weakness, with USD/CAD rising 0.55% to close at 1.4441. The pair rebounded after opening at 1.4371, climbing to a high of 1.4471 before stabilising. The Canadian dollar’s decline comes as markets anticipate an interest rate cut from the Bank of Canada, which is expected to lower rates to 2.75% later this week. USD/CAD remains in an uptrend, holding above key moving averages, with the 50-day SMA at 1.4343 and the 100-day SMA at 1.4198. Immediate resistance is seen at 1.4500, with a break higher potentially opening the door for a test of 1.4600. On the downside, support lies at 1.4400, followed by 1.4350.
  • Gold Slides Below $2,900 as Recession Fears Fuel Profit-Taking: Gold prices fell sharply on Monday, with the metal closing at $2,884, marking a 0.84% decline. After opening at $2,911, gold briefly reached an intraday high of $2,918 before reversing lower to a session low of $2,880. The decline was driven by profit-taking and shifting risk sentiment as investors assessed the broader market turmoil. Despite the pullback, gold remains above key moving averages, with the 50-day SMA at $2,804 and the 100-day SMA at $2,733, suggesting its long-term bullish trend is still intact. Immediate support lies at $2,870, with a break lower potentially leading to further declines toward $2,850. On the upside, resistance is seen at $2,915, with a push above $2,950 needed to reignite bullish momentum.

Market Movers:

  • Tesla Crashes 15%, Hits Lowest Level Since 2020: Tesla shares plunged 15% on Monday, falling below $240 per share and marking their worst day since 2020. The electric vehicle maker has now declined for seven consecutive weeks—its longest losing streak since going public 15 years ago—wiping out all postelection gains. 
  • Nvidia Slumps as Tech Sell-Off Deepens: Semiconductor giant Nvidia tumbled 5% as investors dumped high-growth tech stocks amid escalating recession fears. Other chip stocks followed suit, with Microchip Technology sinking more than 10%, Marvell Technology down over 7%, and ASML Holding slipping 6%. Broadcom and Analog Devices also closed down more than 5% and 4%, respectively, reflecting a broad-based decline in semiconductor stocks.
  • Palantir Extends Losses, Sheds Another 10%: Palantir Technologies dropped 10% on Monday, continuing its recent slide as investors rotated out of speculative technology stocks. Over the past month, the stock has now lost more than 32%, reflecting deep concerns over growth prospects and broader market uncertainty.
  • Meta and Alphabet Fall Over 4% as ‘Magnificent Seven’ Retreats: The once-dominant “Magnificent Seven” stocks saw another wave of selling, with Meta and Alphabet each shedding more than 4%. Apple followed closely, closing down over 5%, while Amazon and Microsoft each lost more than 2%. The heavy losses in the tech sector dragged the Nasdaq down 4%, its worst day since 2022, as investors rotated into safer assets.
  • Cryptocurrency Stocks Plunge as Bitcoin Crashes Below $80,000: Bitcoin’s sharp 8% decline to a four-month low below $80,000 triggered a sell-off in cryptocurrency-linked stocks. MicroStrategy plummeted more than 16%, leading losses in the Nasdaq 100. Coinbase Global, MARA Holdings, and Riot Platforms all fell more than 8% as risk-off sentiment dominated the market.

As the trading session came to a close, markets remained under pressure, with stocks experiencing another steep decline driven by recession fears and uncertainty over US trade policies. Technology stocks saw some of the worst losses, dragging major indices lower as investors shifted toward safer assets. Treasury yields fell as demand for bonds increased, while oil prices slipped amid concerns about global trade disruptions. Gold also retreated as profit-taking set in following its recent gains. With markets facing heightened volatility, investors will be closely watching upcoming economic data and geopolitical developments for signs of what’s to come.