What happened today?
The short answer: Recession fears intensified, and the uncertainty swirling around tariffs remains a stiff headwind. I discuss the president’s Sunday comments below.

The Dow was down about 1,110 points at the low and finished down 890 points or 2.08%, the S&P 500 fell 2.69%, and the Nasdaq lost 4.00%
Last year’s winners are being ditched in favor of more conservative stocks and Treasuries.
MAGS, an ETF that invests in the Mag 7, lost 5.55%. It’s down nearly 15% since the beginning of the year. And the market cap-weighted Nasdaq and S&P 500 are feeling the heat.
Ticker RSP – the equal-weighted S&P 500 – lost 1.4% today. That’s a big move but roughly half the S&P 500’s decline.
Are we headed into a recession?
Monday’s selloff was precipitated by comments by the president.
In a Sunday morning interview on Fox News, President Trump declined to rule out a recession this year, noting, “I hate to predict things like that. There is a period of transition because what we’re doing is very big.”
We’re in a period of transition, and “You can’t really watch the stock market,” he said.
Trump 1.0 touted the stock market as a barometer of his administration.
Trump 2.0 isn’t worried about the stock market, at least publicly.
A Fed put?
Powell’s remark on Friday that “the economy has been growing at a solid pace” saved the day on Friday. It was a distant memory at the opening bell.
And the Fed is in no hurry to cut rates right now.
Back to the question: Are we headed into a recession?
Leading indicators such as weekly jobless claims and the ISM Services Index are not signaling a recession.
And the Fed doesn’t seem to be worried.
But sentiment is influencing investors, and some major banks are reflecting this.
JPMorgan Chase: “We see a material risk that the U.S. falls into recession this year owing to extreme U.S. policies.” They raised the risk of a recession this year to 40% from 30% per the WSJ.
Goldman Sachs: The probability of a recession this year is 20%, up from 15%. They cut their GDP forecast to 1.7% from 2.4% for 2025.
So, there’s no Trump put, and there doesn’t seem to be a Fed put.
In the short term, the market is oversold, and positive news could trigger a significant rebound.
For now, Trump doesn’t seem to be backing down on tariffs against Mexico and Canada, coupled with reciprocal tariffs on trading partners.
Bottom line—
When stocks are priced for perfection, and they were, disappointments create volatility.
The unfortunate reality is that if we enter a recession, a bear market becomes a strong possibility. Historical trends over the past 60 years suggest a bear market would be likely.
But a recession isn’t a foregone conclusion. I don’t think we are in a recession today, and continued economic growth, even if softer, should help cushion the downside, in my view.
Energy is cyclical, and oil lost ground, but energy stocks (XLE) rose today.
Plus, we’re not seeing a big selloff in junk bonds, what I call the economic canary in the coal mine. Ticker JNK fell 0.38% today, and the spread between Treasuries and junk bonds, which have ticked off the bottom, remains extremely narrow.
Corrections hit the market, on average, about once a year. That last 10% pullback occurred in the fall of 2023. We are overdue for a 10% pullback.