(Bloomberg) -- What had been a steady pullback from the US stock market accelerated sharply Monday as investors retreated from virtually every type of risk and economic fear raced across Wall Street.
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Tech stocks tumbled by the most since 2022, sending the Nasdaq 100 Index diving nearly 4%. Crypto prices slid. Corporate bond sales were scrapped. Wall Street’s fear gauge and a key measure of credit risk surged. And Treasuries rallied, pulling yields down steeply, as they took on the role as haven of last resort.
Taken together, they all told the same story: Growing worry that President Donald Trump’s tariff hikes, spending cuts and geopolitical shakeups will stall what until recently has been an economy that defied naysayers with its strength.
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The concerns intensified after Trump and his surrogates started warning there may be some near-term pain as he seeks to reorder the balance of world trade. Investors started preparing for that en masse.
“The trading today felt like an absolute death spiral,” said Alon Rosin, Oppenheimer & Co.’s head of institutional equity derivatives.
The movements show the remarkable shift in sentiment less than two months into Trump’s presidency, which was once welcomed on Wall Street. The initial betting was that his tax-cut and deregulatory plans would spur the market forward by pouring stimulus onto an already solidly expanding economy.
But that’s been swiftly undercut in recent weeks as the chaotic rollout of his tariff hikes and push to slash federal spending darken the outlook. After markets closed Monday, Delta Air Lines Inc. seemed to validate those fears by cutting its profit expectations, citing an erosion in consumer and corporate confidence due to increased uncertainty.
“There’s going to be a period where I think it’s going to be panic at the disco,” Amy Wu Silverman, RBC Capital Markets equity derivatives strategist, said on Bloomberg Television. “We haven’t gotten there yet. But as these levels climb there will be unwinds and more uncertainty that triggers even more.”
Of course, Trump and his administration had started signaling that there may be an adjustment period as he seeks to tame the swelling federal deficit and challenges the global economic order.