[New York Stock Market Close] Sharp Decline as Trump Indicates Willingness to Risk Recession… Nasdaq Down 4%, Tesla Down 15%

# Major U.S. Indices Plummet as Trump's Policies Stoke Recession Fears **New York – Newsis** — Major U.S. stock indices closed sharply lower on the New York Stock Exchange on the 10th (local time), amid investor fears exacerbated by President Donald Trump's assertion that he would pursue his policies even at the cost of an economic recession. Tech stocks showed notable weakness. On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 890.01 points (2.08%) to close at 41,911.71, its lowest level since November last year. The broader S&P 500 index dropped 155.64 points (2.70%) to 5,614.56, experiencing its biggest decline since December 18. The tech-heavy Nasdaq Composite Index plummeted 727.90 points (4.00%) to 17,468.32, reaching its lowest closing level since September 11. Furthermore, the Nasdaq marked its worst day since September 13, 2022, with a drop exceeding 5%. President Trump’s indication that he would forcefully implement tariffs and other policies even if it meant accepting a temporary recession significantly damaged investor sentiment for risk assets. In an interview with Fox News over the weekend, Trump responded to a question about the possibility of a recession by saying, “We are doing something very big, so there will be a 'transition period.'” He emphasized, “We are bringing wealth to America, and that's huge. It will take time, but I believe it will be very good for us.” When asked if he thought a recession was imminent, Trump stated, "I don't like to predict such things. We will experience disruptions, but we will be fine." White House economic adviser Kevin Hassett tried to mitigate the situation by stating that the U.S. economy grew in the first quarter and would grow even faster in the second quarter thanks to tax cuts. However, his comments were insufficient to calm investor fears. # Reaction from Analysts and Traders Edward Al-Hussainy, senior interest rate and currency strategist at Columbia Threadneedle Investments, noted, “Has the economy really fallen off a cliff in the last six weeks? No. However, the diagnosis from late last year and now is dramatically different.” While opinions vary on how long the current stock weakness will last, there is a consensus that market volatility will persist until the Trump administration's trade policies become clearer. The administration is set to announce mutual tariffs on March 2. Last week, the S&P 500 index fell 3.1%, recording its worst week since last September. The Dow and Nasdaq indices declined by 2.4% and 3.5%, respectively. Ed Yardeni, a well-known U.S. stock market bull, weighed in on the possibility of a bear market. Yardeni wrote in a report the previous day, “In Trump’s world, anything is possible,” and suggested that the bear market might have begun on February 20, one day after the S&P 500 reached an all-time high. Dennis Dick, a trader at Triple D Trading, warned, “Foreign investors are pulling out of the U.S. market and looking elsewhere. This is not an unwinding that will occur overnight; it could get really ugly.” # Some See a Silver Lining However, some experts view this correction positively. Sam Stovall, chief investment officer (CIO) at CFRA Research, stated, “We are in a manufactured correction.” Stovall explained, “By manufactured, I mean the reaction to the new administration’s tariff program or at least the threat of tariffs and how it will impact the economy.” He added, “We are currently experiencing a typical pullback, and possibly a moderate correction before it's over. This could be good for resetting the ongoing bull market.” Market participants who confirmed last week's slowdown in the labor market are now awaiting the February Consumer Price Index (CPI) report on the 12th. If inflation shows progress toward the Federal Reserve's 2% target, the market may take comfort that the Fed can respond to the economic slowdown. Stovall added, “What can encourage investors is the expectation among economic experts that both headline CPI and core CPI indicators will improve, as will the Producer Price Index (PPI). If inflationary pressures ease, it will significantly contribute to calming investor nerves.” He further noted, “The market is approaching oversold levels, so any good news could at least trigger a counter-trend move.” Amid heightened safe-haven sentiment, U.S. Treasury yields fell. At 3 p.m. in New York, the yield on the 10-year Treasury note dropped 10.4 basis points (1bp = 0.01 percentage points) to 4.213%, the lowest since February 13. The yield on the policy-sensitive 2-year note fell by 10.6 basis points to 3.895%, the lowest since September 4 last year. Bond yields move inversely to prices. Stocks of the “Magnificent Seven” (Amazon, Alphabet, Apple, Nvidia, Microsoft, Meta Platforms, Tesla) all tumbled. Tesla plunged 15.43% for its worst performance in five years, while Nvidia fell 5.07%, distancing itself from its high by 30%. Apple and Alphabet also dropped 4.85% and 4.49%, respectively. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), often referred to as Wall Street's fear gauge, surged 18.91% to 27.80. mj72284@newspim.com