US stocks plunged on Monday after US President Donald Trump declined to rule out the possibility of a recession this year in a Fox News interview following his tariff policies.

At market close, the Dow Jones Industrial Average dropped 2.08 percent, the S&P 500 fell 2.70 percent and the Nasdaq Composite Index tumbled by 4 percent.

Tesla plunged more than 15 percent while semiconductor companies ASML and Micron Technology each fell over 6 percent. Nvidia lost more than 5 percent.

A poster of US President Donald Trump is seen as traders work on the floor of the New York Stock Exchange in New York City, United States, March 7, 2025. /VCG

Market analysts warned that the Trump administration's approach could have broader implications for investor sentiment. 

Ross Mayfield, an investment strategist at Baird in Louisville, Kentucky, told Reuters that Trump's recent comments suggested he was willing to tolerate market downturns in pursuit of his policy goals, a stark shift from previous assumptions that his administration would prioritize stock market stability, referring to it as "a big wake-up call for Wall Street."

Economic concerns were further exacerbated by downward revisions in US growth forecasts, according to China Central Television.

In a report released last Friday, Morgan Stanley lowered its US economic growth projections for 2025 from 1.9 percent to 1.5 percent. Estimates for 2026 were lowered from 1.3 percent to 1.2 percent. 

On Monday, Goldman Sachs also cut its 2025 US GDP growth forecast from 2.4 percent to 1.7 percent.

Rich Privorotsky, head of European One Delta Trading at Goldman Sachs, said that current US policies were weighing heavily on consumer confidence and shaking investor trust in equity markets.

He also pointed to uncertainty surrounding artificial intelligence investments, particularly in light of China's growing influence in the sector.

Meanwhile, trade tensions escalated as Canadian provinces announced retaliatory measures against US tariffs. 

British Columbia Premier David Eby declared that all US-made alcoholic beverages would be removed from the province's liquor stores, while Ontario imposed a 25 percent tax hike on electricity exports to the US.

Peter Berezin of BCA Research highlighted the differing economic attitudes between the US and its northern neighbor, stating on X, "Americans have very little tolerance for any economic pain; whereas Canadians are willing to put up with a lot to repel an unjust attack."