Stock market slumps as Trump's trade war grows

Between an escalating trade war, a slowed labor market and President Trump’s declining to rule out an imminent recession, the stock market has seen better days.

The S&P 500, which tracks the performance of the United States’s top 500 companies, experienced its worst day of the year on Monday, CBS News reported — plummeting by 3.3%, or 187 points. The Dow wasn't faring much better, plunging by 1,100 points on Monday afternoon before evening out to a net loss of 2.1%.

The slide followed Trump's appearance on Fox News' "Sunday Morning Futures," where he said recent economic red flags indicate a “period of transition.” 

“Look, we’re going to have disruption,” Trump said, “but we’re OK with that.”

“What I have to do is build a strong country,” he added. “You can’t really watch the stock market.”

On Tuesday, stocks slid again after Trump said he will put additional tariffs on Canadian steel and aluminum imports as a result of Canada retaliating with a 25% surcharge on electricity exports to the U.S. The Dow Jones Industrial Average fell 437 points after Trump's announcement, CNBC reported. 

China has reacted to Trump's tariffs by putting a 15% tariff on chicken, wheat and corn imports from the U.S., as well as a 10% tax on soybeans, pork, beef and fruit. 

Treasury Secretary Scott Bessent said the economic instability is the result of “detoxing" from the Biden administration. 

“There’s going to be a natural adjustment as we move away from public spending to private spending,” Bessent said Friday on CNBC. “The market and the economy have just become hooked and we’ve become addicted to this government spending, and there’s going to be a detox period.”

The comments reflect a "tolerance for pain on the part of the administration in pursuit of trade goals that are not necessarily entirely economic in nature,” said Ross Mayfield, Baird investment strategist, per CNBC.

“At this point I’m still in the camp that we’re not on the doorstep of a recession, but maybe a slowdown or growth scare," Mayfield told CNBC. "Non-recession sell-offs tend to be shorter and milder than the recessionary ones.”