The day before the Dow Jones Industrial Average was going to decline by as many as 1,188 points, President Donald Trump said "I hate to predict things like that" when asked whether he expected a recession in 2025. It's a response to comfort neither investors nor consumers, and it's reflected in both equity and bond market price action on Monday.
Over the weekend, President Trump said in an interview with Fox News Channel that reciprocal tariffs announced on February 13 will take effect on April 2. The White House has directed Commerce Secretary Howard Lutnick to provide a tariff implementation plan on April 1.
"If they charge us, we charge them" is how the president has described his trade plan, which is based on raising tariffs on foreign goods to match tariffs imposed by other countries on U.S. products.
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Questioned about the potential impact on growth as reflected in the steep decline in the Federal Reserve Bank of Atlanta's GDPNow forecast tool and the prospect of a recession this year, Trump said, "I hate to predict things like that.
"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." As Trump acknowledged, "It takes a little time. It takes a little time."
"We have cut our 2025 U.S. growth forecast to 1.7% Q4 over Q4," writes Goldman Sachs Chief Economist Jan Hatzius in a midday note, explaining that it's his "first below-consensus call in two and a half years." In addition to trimming his growth forecast, Hatzius raised his U.S. inflation forecast – "both on the back of more adverse tariff assumptions."
At the same time, support for a continuing bull market is emerging elsewhere: "By contrast," Hatzius writes, "our Euro area growth forecast has risen, especially for 2026-2027, as we now expect significantly easier fiscal policy in Germany."
It was a U.S. sell-off foretold by equity market futures as soon as Sunday, and investors, traders and speculators delivered. We'll see what happens to consumers. All three main U.S. equity indexes gapped down at the opening bell and basically trended down all day.
And the yield on the 10-year U.S. Treasury note slid from 4.318% on Friday to as low as 4.198% and settled at 4.223%. Expectations for a rate cut at the Federal Open Market Committee's May meeting are rising, with the fed fund futures market now reflecting a 46.1% chance the central bank takes its main benchmark down 25 basis points, up from 26.3% as of February 10.
At the closing bell, the blue-chip Dow Jones Industrial Average was down 2.1% at 41,911. The broad-based S&P 500 had lost 2.7% to 5,614. And the tech-heavy Nasdaq Composite shed 4% to 17,468.
The uncertainty of tariffs
"Market volatility is much less about the bad news of tariffs and much more about the uncertainty of tariffs," observes David Bahnsen, chief investment officer of The Bahnsen Group. "The talk of tariffs is in a lot of ways worse than the implementation of them. The tariff talk, reversal, speculation, and chaos only fosters uncertainty."
Bahnsen underscores "uncertainty as to what the policy is, where it is headed, how long it will last, and what the end result will be" and cites "uncertainty around the expiring tax cuts" at the end of 2025. It's this combination that's dragging on markets.
"I do not believe the administration knows how the tariff situation will play out," Bahnsen concludes. "but if I were a betting man I would say that it will persist long enough to do damage to economic activity for at least a quarter or two."
Bahnsen expects to see "a deal with different countries that makes everyone wonder why we went through all the fuss." The money manager says a tax cut extension and passage of a tax reform bill "through budget reconciliation sooner than later" would "help offset the damage."
Redfin rockets on M&A move
Redfin (RDFN) is being acquired by Rocket Companies (RKT) in an all-stock deal that values the online real estate brokerage at $12.50 per share. RDFN was up 67.9%, and RKT was down 15.4%.
Rocket CEO Varun Krishna said in a statement that the combined company "will improve the experience" of buying and selling homes "by connecting traditionally disparate steps of the search and financing process with leading technology that removes friction, reduces costs and increases value."
According to Shyam Patil of Susquehanna International Group, "The deal is expected to drive over $200 million in revenue and cost synergies on a run rate basis by 2027" and will be "accretive to Rocket's adjusted earnings per share by the end of 2026." The analyst has a Neutral (Hold) rating on RDFN.
DoorDash delivered into S&P 500
DoorDash (DASH) had an up-and-down session following news that it will be added to the S&P 500, effective ahead of the March 24 open. DASH rose as much as 2.7% from its Friday closing price at the opening bell, before falling as much as 4.6% over the next hour-plus, and eventually leveling off for a loss of 0.1%.
Deutsche Bank analyst Lee Horowitz recently reiterated his Buy rating on DASH and raised his 12-month price target from $224 to $246.
As Horowitz notes, "There are few names across our coverage that are capable of investing in massive digitally immature total addressable markets, thus delivering market-leading share gains within these large opportunities, while simultaneously growing earnings greater 50% year over year consistently."
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