US stocks wobble after selloff amid recession concerns
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(NEW YORK) — U.S. stocks seesawed between positive and negative territory in early trading on Tuesday, remaining essentially unchanged after losses suffered Monday when markets reacted to President Donald Trump’s refusal to rule out a possible recession.
The Dow Jones Industrial Average ticked down about 225 points, or 0.5%, while the S&P 500 ticked up 0.2%. The tech-heavy Nasdaq inched higher about 0.5%.
Wobbly markets in early trading on Tuesday followed a days-long market decline touched off by U.S. tariffs imposed last week on Canada, Mexico and China, some of which were delayed. Retaliatory tariffs issued by China on Monday deepened a trade war between the world’s two largest economies.
On Monday, the tech-heavy Nasdaq plummeted 4%, recording its worst day of trading since 2022. The Dow Jones Industrial Average and S&P 500 each dropped more than 2% on Monday.
The market drawdown on Monday extended losses last week. The S&P 500 recorded its worst week since September.
When asked about a potential recession in an interview broadcast on Sunday, Trump said tariffs imposed in recent days could bring about a “period of transition.”
“I hate to predict things like that,” Trump told Fox News in an interview recorded on Thursday. “It takes a little time, but I think it should be great for us.”
In response to a question later on Sunday about his reluctance to rule out a recession, Trump said: “I tell you what, of course you hesitate. Who knows?”
The Bureau of Labor Statistics is expected Tuesday morning to release a report on how many jobs are open in the economy, which could provide another clue about the strength of economy amid the new recession concerns. An inflation report is expected Wednesday.
This is a developing story. Please check back for updates.
(NEW YORK) — While Elon Musk has vaulted into a powerful role overhauling government agencies and upending Washington, the world’s richest person has suffered a $106 billion drop in wealth due to steep decline in shares of his Tesla electric car company.
Tesla’s stock price has plummeted 30% from its all-time high in December, including a 21% selloff since Inauguration Day. The losses have sent Musk’s net worth tumbling from a peak of $486 billion on Dec. 17 to its current level of about $380 billion, according to Bloomberg.
The stock woes have divided current and former Tesla shareholders. Critics of Musk fault his new role and polarizing reputation, blaming recent reports showing lackluster sales in some regions on his foray into politics. They say Musk must step away from the Trump administration for the company to thrive. Supporters, on the other hand, say Musk’s role in the White House has little to do with the selloff, noting that Tesla shares remain higher than where they stood on Election Day. Instead, some say, the company is suffering growing pains as it weathers stiff competition in electric vehicles and pursues new ventures like self-driving taxis.
“I don’t have a problem if Elon wants to save a bunch of money for America. I say, ‘Where’s the good part in this for Tesla'” Ross Gerber, a prominent Tesla investor, told ABC News, referring to cost-cutting efforts undertaken by Musk’s Department of Government Efficiency. Tesla representatives did not respond to ABC News’ request for comment.
Despite disagreement over the effect of Musk’s government role, both current and former Tesla shareholders who spoke to ABC News broadly acknowledged the company’s recent business hiccups.
Tesla sold fewer cars in 2024 than it did the year prior, marking the company’s first year-over-year sales decline in more than a decade, earnings released in January showed. As rivals have challenged Tesla’s dominance over the electric vehicle market, the company has promised a future revenue stream from autonomous taxis, also known as robotaxis.
Musk announced in late January that the company would roll out its robotaxi test program in Austin, Texas, in June. But within days, China-based competitor BYD unveiled advances in self-driving technology, which the company said was set to be included in models costing as little as $9,600. Gary Black, managing partner of The Future Fund, which manages $100 million in assets, including Tesla shares, said the recent selloff of Tesla is primarily the result of investor jitters about whether the company can dominate self-driving technology the way it did electric vehicles.
“Over time, you will see Teslas and other cars self-drive. But Tesla is not going to be the only one,” Black told ABC News’ Elizabeth Schulze.
The stock also faced downward pressure this week when a Musk-led group of investors offered to buy OpenAI for $97.4 billion, making possible a scenario in which Musk would sell some of his Tesla shares to finance the deal, Black said. Black said that, in his opinion, the downturn has nothing to do with Musk’s government role.
“It’s always good to know the president of the United States — to be able to pick up your phone and say, you know, ‘I need this favor, that favor,'” Black said.
A jump in Tesla shares after Trump’s victory suggests many investors viewed the relationship that way. The stock price soared about 85% over a six-week period following Election Day.
But some investors lay the blame for the downturn squarely at Musk’s feet.
Nell Minow, Vice Chair of ValueEdge Advisors and a longtime critic of Musk, said Musk has been “absent” from the company.
“I think that he is a huge drag on the stock right now,” Minow told Schulze. “No question, he’s a problem.”
“Elon Musk is to the Tesla brand what the Green Giant is to corn,” Minow said. “He has made himself the brand and that is always very risky.” Minow, who said she donated nearly all of her Tesla shares to charity last year, also criticized the Tesla board for what she said was a failure to hold Musk to account, or update shareholders and the public about a leadership plan while Musk runs DOGE.
“We don’t know what the board is thinking. They have not spoken out in any way,” Minow said. “They have not made a filing with the SEC about what the impact of this side hustle is, and the employees and the shareholders need some kind of certainty.”
New York City Comptroller Brad Lander echoed concerns about the board’s ability to rein in Musk. Lander, who oversees $1.25 billion in Tesla stock through the city’s five pension systems, said the lack of oversight was a “long-standing problem.”
“Independent governance is designed to provide a voice for shareholders at the table,” Lander, who is running for New York City mayor and has publicly sparred with Musk, said in a statement to ABC News. “When companies are controlled by a set of directors with either family or aligned interests, they lose this.”
For his part, Musk has looked to hype up Tesla’s prospects, saying on an earnings call last month that he believes there is an opportunity for it to be “the most valuable company in the world.”
During the call, AllianceBernstein Research analyst Daniel Roska questioned Musk on how Tesla plans to meet its ambitious projections given its high valuation.
Musk emphasized Tesla’s focus on real-world AI, claiming the company is making significant strides.
“We’re working on perfecting real-world AI and making rapid progress week over week, if not month over month,” Musk said. “I go where the problem is, essentially … I focus where the challenges are the greatest.”
Some Tesla shareholders remain bullish on the company despite its short-term drop. Angel investor Larry Goldberg, known as “Tesla Larry,” posted on X that he supports Musk’s political efforts, even if they impact the company’s stock price.
“If the Trump administration (and DOGE) does not fix the deficit, my Tesla shares — and everyone’s US stocks and bonds will be worthless,” Goldberg wrote.
(NEW YORK) — The stock market fell in early trading on Tuesday, just hours after the Trump administration’s long-promised tariffs took effect.
The Dow Jones Industrial Average dropped nearly 800 points, or 1.8%; while the S&P 500 also fell 1.8%. The tech-heavy Nasdaq tumbled 1.6%.
The policy taxes imports from Mexico, Canada and China — the three largest trading partners of the United States — meaning that it could raise prices for everything from gasoline to avocados to iPhones.
Shares of retail giant Target fell 4.5% in early trading on Tuesday, following an earnings release from the company that cited “tariff uncertainty” as a potential impediment for the business. Walmart’s stock price dipped 1% on Tuesday, while Amazon shares fell 2%.
Shares of Best Buy plummeted more than 13% on Tuesday morning. The sharp drop came hours after Best Buy CEO told analysts that price increases are “highly likely” as a result of the tariffs.
Higher costs for car production could also pose a challenge for U.S. automakers, many of which depend on a supply chain closely intertwined with Mexico and Canada.
Shares of Ford tumbled 3% on Tuesday, while General Motors dropped more than 4%. Stellantis — the parent company of Jeep and Chrysler — saw shares plummet more than 7%.
Tesla, the electric carmaker led by Elon Musk, saw its stock price drop nearly 7%.
The far-reaching losses extend a market slide that began on Monday afternoon when Trump affirmed plans to impose a fresh round of tariffs.
Trump stuck to a March 4 start date for 25% tariffs on imports from Mexico and Canada, as well as 10% tariff on Chinese goods — which, as of Tuesday, rises to 20%, per an amended executive order.
Tariffs of this magnitude would likely increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers, experts said. The duties also raise input costs for manufacturers that import raw materials.
In addition to Tesla and Amazon, the tariffs appeared to impact some of the other so-called “Magnificent Seven,” a group of large tech firms that helped drive stock market gains in recent years.
Chipmaker Nvidia, which relies on semiconductors from Taiwan but also imports some materials from Mexico, saw shares drop more than 2%.
Meta, the parent company of Facebook and Instagram, suffered a 4% drop in its stock price. Microsoft’s stock fell 1%.
Shares of Alphabet and Google defied the trend, however, remaining essentially unchanged in early trading on Tuesday.
This is a developing story. Please check back for updates.
The owner of Texas Cafe in Rio Grande City, Texas, Becky Garza, speaks with ABC News’ Mireya Villareal in December 2024. (Mireya Villareal)
(RIO GRANDE CITY, TEXAS) — Emily Williams Knight, president and CEO of the Texas Restaurant Association, represents 58,000 restaurants that employ 1.5 million Texans. That breaks down to 11% of the state’s workforce that could potentially be impacted by the 25% tariffs on Mexican imports that just went into effect.
All Tuesday morning she was on calls and in meetings, calming fears because people believe Texas will feel the brunt of this first — And, after that, the domino effect will be fast.
“Exhausted and afraid: Those are the words I keep hearing from people,” Williams Knight said. “They’re running out of levers to pull here, and they’re afraid. If this is a sustained tariff policy — what that will mean to their business long term? The unpredictability comes with a tremendous cost.”
One of those concerned businesses is Texas Cafe in Rio Grande City, which has been serving South Texas for more than 85 years and was recently certified as a historical landmark by the State of Texas. People travel from all over the country to try their signature dish, Envueltos: A special chile-con-carne filling rolled up in a tortilla. But don’t call it an enchilada or the owner, Becky Garza, will scold you profusely.
“These are my grandfather’s recipes that he invented back in 1939,” she said. “And when you change something, people notice. Especially Hispanic people.”
Garza is getting ready for Cuaresma, or 40 days of Lent. It is essential that she gets very specific ingredients from Mexico for this time of year or her customers will know something isn’t right. Plain and simple: Her business, livelihood and family legacy depend on imports from Mexico that play an essential role in the food she serves. And now, she said, all of that is going to cost more because of the new tariffs.
“I can buy stuff from Mexico cheap and use it in my home. But I can’t use any of those products from Mexico in my business unless I buy them from a store that follows FDA guidelines. I buy Mexican cokes. I get cinnamon sticks. These are a very high-price now and sometimes hard to find. I get pilonsios. Chile guajillo for menudo. And avocados from Mexico are better — the real avocados from Mexico that you can only find in small stores. But boy, they are expensive, and it’s only going to get worse,” Garza explained, adding: “I will not stop getting these items from Mexico, because I don’t want to change the consistency or the quality.”
Garza has seen prices steadily increasing over the last few years. In 2024, she spent around $1,000 for her specialty Cuaresma items. But in 2025, she spent $1,200 — a 20% increase that may not seem like a lot to big retail chains, but is huge for small business owners like Garza.
Knight wholeheartedly agrees, saying, “In the last four years we’ve seen a 35% increase in the cost of food needed in these restaurants and a 36% increase in labor. That’s not even including the big swipe fees businesses are paying, plus the increases to rent and utilities.”
Over the last 30 days, TRA has worked closely with the National Restaurant Association on a strategy to help mitigate the uncertainty. They’ve suggested restaurants review their menus and supply chain, looking for ways to source things closer to their businesses. They’ve also encouraged businesses to keep pushing the value of their service and products. And, before these tariffs went into effect, they reached out to lawmakers to educate them on the impact and push for exemptions.
“It feels like we are in this very unknown space again,” Williams Knight said.
Small, independent businesses make up 70% of the restaurants in Texas.
So, while both big and small establishments will be impacted, Williams Knight said she worries that this will create a ripple effect that could drive some families to close up shop.
She said that some of their restaurants are already starting to get emails from suppliers about costs going up, and she compared the feeling to a few days after the COVID-19 pandemic shutdown was announced, explaining: “You’re going to see a very large number of closures and then a large number of people unemployed.”
For years, as prices have gone up, Garza has found a way to cut back and save so she doesn’t have to charge customers more. In fact, she’s been working a second, primary job that sustains her own day-to-day needs, opting not to take a real paycheck from Texas Cafe. But she’s retiring in June and having to think about her future. And for the first time since she’s taken over the restaurant, Garza made the tough decision on Tuesday to raise prices.
“I had a meeting with my waitress and we’re going up on the breakfast menu due to the high price of eggs,” Garza explained. “I save money and I am frugal. But right now it’s been getting difficult.”
Not wanting to manifest any other difficulties the restaurant may face in the future, she said that’s all she’s willing to do and talk about for now.
However, there are indicators that the tariff policies that went into effect Tuesday may not affect small businesses as extremely as some are predicting, or their customers, for too long.
President Donald Trump’s administration could announce a pathway for tariff relief on Mexican and Canadian goods covered by the North America Free Trade Agreement as soon as Wednesday, according to an interview with Commerce Secretary Howard Lutnick on Fox Business on Tuesday.
ABC News’ Zunaira Zaki contributed to this report.
