By Gokhan Ergocun
ISTANBUL (AA) - US stocks ended sharply lower Monday as President Donald Trump's statements on tariffs at the end of last week fueled concerns of a recession in the US economy.
In an interview Sunday, Trump did not rule out the possibility that tariffs on Canada and Mexico could cause the country's economy to enter a recession or increase inflation this year.
Asked whether a recession was expected this year because of the tariffs, he said he “hates” making predictions on such matters, adding: “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. But I think it should be great for us."
Regarding whether the tariffs will fuel inflation, Trump emphasized that it may affect inflation, but interest rates have also fallen.
While developments regarding Trump's tariff policy continue to affect the direction of the markets, a 25% tariff on all steel and aluminum imports is expected to take effect on March 12.
Meanwhile, Doug Ford, the premier of Ontario, Canada's most populous province, announced that they will impose a 25% surcharge on the electricity they supply to US states in response to Washington's tariffs.
On the macroeconomic data side, signals from the employment data released last week supported the risks to growth in the US.
Short-term inflation expectations in the US rose by 0.1 percentage points, a survey conducted by the New York Fed showed Monday.
With these developments, the VIX Index, also known as the “fear index,” increased by more than 19% to 27.8.
The Dow Jones Industrial Average fell 2.08%, or 890.01 points, to end the day at 41,911.71.
The S&P 500 went down by 2.7%, or 155.64 points, to 5,614.56, and the Nasdaq Composite lost 4%, or 727.9 points, to 17,468.32.