Nasdaq 100 Suffers Largest Decline Amid Growing Recession Fears

Nasdaq 100 Index fell 3.8% as Monday’s selling wiped off over $1 trillion.

Nasdaq shares saw their biggest one-day decline since 2022 as investors abandoned long-standing market leaders due to growing concerns that the economy is on the verge of recession.

The Nasdaq 100 Index, the stock market index of 100 non-financial companies listed on the Nasdaq stock exchange, fell 3.8% as Monday’s selling wiped off over $1 trillion.

The Bloomberg Magnificent 7 Index, an equally weighted measure of the largest US tech stocks, fell 5.4%, increasing its loss from a December record to over 20%.  

The Standard and Poor’s 500, or simply the S&P 500 index, dropped by 2.7% to stay less than 9% below its peak on February 19.

Tesla Inc. stocks fell 15%, increasing its loss this year to 45%. The share prices went to $222.15, down 41.43% in 2023 on a year-to-date basis.

Elon Musk, the tech billionaire and head of X, Tesla, and SpaceX, confesses that he is having “great difficulty” managing all these businesses.

In only two months, Nvidia Corp. lost 5.1% and erased more than $1 trillion in market value.

The tech devastation happened just after a weekend when President Donald Trump and his administration officials hinted that the US economy is set to slow. The shift in language from the campaign trail when Trump promised tariffs on day one that would pay tax cuts without disturbing growth sparked the repricing of risky assets.

Michael Bailey, director of research at Fulton Breakefield Broenniman, advised selling the shares, adopting the bear strategy, and being undercover for some time.  

Recently, mega-cap tech companies with a market capitalization above $200 billion have been winners by all measures. Apple, Microsoft, and Nvidia all saw their valuations increase to over $3 trillion, with Amazon and Alphabet following closely behind.

For weeks, Wall Street has been cautiously moving from technology to more conservative industries as on-again, off-again trade policies worried investors and inflation proved to be sticky. The rotation accelerated on Monday after getting unsettling comments about the growth.

The sell-off has been even more extreme in the speculative areas of the market. Monday saw a 6.6% decline in many unprofitable information technology (IT) companies, which now lost 23% of their value this year. The market is heading for its worst quarter since 2022.

When asked whether he is expecting a recession in the US, Trump remarked that he does not want to predict it and that the United States is in a transitional phase since they are taking significant measures for the development. Additionally, as the US shifts away from public spending, Treasury Secretary Scott Bessent called it a “detox period needed to reach a more sustainable equilibrium.”

According to Federal Reserve Chair Jerome Powell, the US economy is doing well but also emphasized the need for caution on cutting borrowing costs.

The yield on the 10-year Treasury dropped from 4.32% late Friday to 4.21% in the bond market.

Except for Meta, all the Magnificent 7 ETPs are down for the year. Nvidia is down double digits, and Tesla has lost around $600 billion in 2025. Apple stocks reduced 0.6%, and Microsoft stocks remained the same.

Among the banks, Goldman Sachs and JPMorgan Chase increased by 0.06% and 0.25%, respectively.

Cryptocurrency stocks dipped as the bitcoin prices declined. Riot slid 5.2%, Coinbase lost 10.2%, and MicroStrategy fell 11.7%.

As the dollar value somewhat increased, gold prices decreased. Gold futures were stable at $2,911.60, but spot gold dropped 0.2% to $2,905.05 an ounce.

Oil prices declined on signs of economic instability in the world’s two biggest crude consumers, the United States and China.

West Texas Intermediate dropped more than 15% from its mid-January peak to trade below $67 a barrel.