Stock market continues its dive as Trump leaves recession on the table

News Coverage:

“Equity futures down into the red after stocks posted their worst week since September.”

“President Donald Trump’s sending markets on a roller coaster ride amid his policy changes, especially trade policy.”

Simone Del Rosario:

Markets continued to fall on Monday as President Donald Trump declined to rule out a recession during an interview with Fox Business.

Question: Are you expecting a recession this year?
President Donald Trump: I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of, it takes a little time. It takes a little time.

Simone Del Rosario:

His commerce secretary was more definitive in his comments.

Question: Should Americans brace for a recession?
Howard Lutnick: Absolutely not. Anybody that bets against Donald Trump, it’s like the same people that thought Donald Trump wasn’t going to win a year ago. Donald Trump is a winner, he’s going to win for the American People. That’s just the way it’s going to be. There’s going to be no recession in America.

Simone Del Rosario:

Markets have been reeling in recent weeks as investors worry about the impact the president’s tariffs could have on U.S. consumers and the economy as a whole. The extent of the tariffs continues to take shape.

Last month, Trump announced he would impose 25% tariffs on Mexico and Canada. He then delayed the levies for a month, taking effect Tuesday of last week. On Wednesday, he offered tariff relief for American automakers for 30 days. By the end of the week, Trump put a hold on tariffs on goods from Mexico and Canada covered by the USMCA until next month.

Donald Trump:

I wanted to help Mexico and Canada, to a certain extent, we’re a big, big country, and they do a lot of their business with us, whereas in our case, it’s much less significant. We do very little with Canada by comparison, and I wanted to help the American car makers until April 2. April 2. It becomes all reciprocal. What they charge us, we charge them.

Simone Del Rosario:

Last week, the S&P 500 (-3.1%) and tech-heavy Nasdaq (-3.5%) each lost more than 3%. Meanwhile, the Dow went down 2.4%.

Markets went on a bit of tear after President Trump won the election in November. As of Monday, the S&P 500 and NASDAQ have given up all of those gains and are now below the level seen on Election Day.

Donald Trump:

Look, what I have to do is build a strong country. You can’t really watch the stock market. If you look at China, they have 100 year perspective. We have a quarter. We go by quarters. That’s true, and you can’t go by that.

Simone Del Rosario:

No matter how much the stock market struggles, it doesn’t necessarily mean a recession is in the works. Traditionally, the U.S. enters a recession if it faces two consecutive quarters of declining economic activity. At this time, we’re nowhere close to that. The economy grew at an annual rate of more than 2% last quarter.

But really, even two quarters of decline doesn’t always cut it. A group of eight economists at the National Bureau of Economic Research are tasked with taking a more nuanced approach to declaring an official recession. The folks who make that decision say a recession “involves a significant decline in economic activity that is spread across the economy and lasts more than a few months.”

Currently, you’re not seeing that full-throated warning that a downturn is in the offing.

Some headlines point to concerns…

Newsweek cites economists being “increasingly worried” about a recession. CNBC writes economists see the president as “an agency of chaos and confusion” but don’t see a recession as inevitable yet.

But even if there is that full-throated warning, that alone does not spell recession. Remember that in 2022, and again in 2023, many economists fully expected the U.S. to enter a recession that never happened.

So if the stock market can’t tell you, and the headlines can’t tell you, what about the music? Search “recession pop” at SAN.com or the SAN app for this unconventional recession clue.