Wall Street Raises Recession Alarm, Markets Tumble

Fears of a U.S. recession intensified on March 10, triggering a sharp sell-off in both equities and cryptocurrencies. Despite the White House’s attempt to calm market jitters, major Wall Street banks and asset managers have raised their recession probability forecasts from an earlier 15%-30% range to 20%-40%, signaling a severe loss of investor confidence.

Traditional Finance Giants: Recession Risks Are Rising

According to The Wall Street Journal (WSJ), JPMorgan economists have increased the probability of a 2025 U.S. recession from 30% to 40%. Analysts argue that extreme economic policies under the current administration have significantly heightened downside risks.

Similarly, Goldman Sachs revised its 12-month U.S. recession forecast from 15% to 20%. Analysts warn that if Trump’s administration continues its economic stance despite worsening data, the risk of a recession could rise even further.

Meanwhile, Morgan Stanley has lowered its economic growth projections and raised inflation expectations. The firm predicts U.S. GDP growth will slow to 1.5% in 2025 and further decline to 1.2% in 2026.

Earlier, the Atlanta Federal Reserve’s GDPNow model slashed its Q1 2025 GDP growth forecast from 3.9% to a contraction of -2.4%, fueling recession fears.

White House Attempts to Reassure Markets

Despite escalating concerns, President Trump’s economic advisor, Kevin Hassett, downplayed recession fears in a March 10 interview with CNBC, stating:

“There are still plenty of reasons to be optimistic about the U.S. economy. The recent economic data volatility is just a short-term fluctuation.”

Trump himself addressed the issue in a March 9 Fox News interview, describing the U.S. economy as being in a “transitional phase.”

Tech Stocks Plunge as “Trump Bump” Fades

U.S. equity markets have seen a massive sell-off in recent days, particularly in tech stocks, signaling the end of the post-election “Trump Bump” rally.

• On March 10, the S&P 500 fell 2.7%, hitting its lowest level since September 2024.
• The Nasdaq plunged 4%, marking its worst single-day performance since 2022.
• The Dow Jones Industrial Average lost nearly 900 points (-2.1%) in a broad market rout.

The “Magnificent 7” tech giants saw their market value shrink by over $750 billion in a single day:

• Tesla (TSLA) plummeted 15%, making it the worst-performing S&P 500 stock this year.
• Nvidia (NVDA): -5.1%
• Apple (AAPL): -4.9%
• Meta (META): -4.4%
• Alphabet (GOOGL): -4.5%

Crypto Market Not Spared from Sell-off

The crypto market also suffered heavy losses, with its total market capitalization dropping 7.5% on March 11, wiping out $240 billion.

• Bitcoin (BTC) plunged below $77,000, falling 4% in a single day.

Gold advocate Peter Schiff took the opportunity to mock Trump’s Bitcoin reserve strategy, arguing that Bitcoin’s extreme volatility undermines its legitimacy as a government-held asset.

Market Outlook: Uncertainty Looms

With rising recession fears, surging inflation concerns, and continued market turbulence, analysts remain cautious about short-term economic and financial market stability. The upcoming March 7 White House Crypto Summit and federal policy decisions could play a critical role in shaping investor sentiment moving forward.