Washington, March 12, 2025- U.S. stocks plunged on Monday and Tuesday as investors grappled with mounting concerns over the health of U.S. economy.
The Dow Jones Industrial Average fell 890.01 points, or 2.08 percent, to 41,911.71. The Standard and Poor’s 500 dropped 155.64 points, or 2.70 percent, closing at 5,614.56, while the Nasdaq Composite Index tumbled 727.90 points, or 4.00 percent, to 17,468.33, its worst day since 2022.
Analysts are increasingly worried that the U.S. economy may face a prolonged period of sluggish growth. In a research note, Goldman Sachs chief economist Jan Hatzius revised his 2025 GDP forecast downward to 1.7 percent from 2.4 percent while raising his projection for the Fed’s preferred inflation gauge to end the year at 3 percent, up from prior estimates in the mid-2 percent range.
These updated forecasts mark the first time in roughly two and a half years that U.S. GDP growth is expected to fall below consensus data, which currently anticipates above 2 percent growth.
Investors continued to seek safe-haven assets, driving demand for bonds and pushing the 10-year U.S. Treasury yield down to 4.22 percent, as bond prices and yields move inversely.
The simultaneous decline in stocks and interest rates is often viewed as a sign of growing economic uncertainty. Adding to the cautious sentiment, oil prices also dropped, reflecting broader concerns about the economy’s outlook.
As market sentiment is fragile, investors continue to weigh Trump’s mixed signals on tariffs and recession warnings against the backdrop of tightening trade policies and evolving monetary policy expectations.
The coming weeks will be critical, with the February consumer price index to be released on Wednesday and the producer price index set to follow on Thursday.
