Key Takeaways
- The S&P 500 dropped 2.7% on Monday, March 10, as U.S. tariffs and government job cuts heightened economic uncertainty and provoked recession concerns.
- Tesla stock dove as analysts raised red flags about demand and a report revealed slumping vehicle shipments in China last month.
- Regeneron Pharmaceuticals moved higher after promising results from a clinical trial of Dupixent for the treatment of a rare skin condition.
Major U.S. equities indexes plunged on the first day of the new trading week as economic concerns intensified.
Implications of U.S. trade policies and cuts to the federal government workforce may be giving investors pause as uncertainty spreads across the economy. In an interview over the weekend, President Donald Trump said he could not rule out the possibility of a recession this year.
The S&P 500 fell 2.7%, while the Dow closed Monday’s session down 2.1%. An escalating selloff in the tech sector dragged down the Nasdaq, which dropped 4.0%, suffering its heaviest daily loss since September 2022.
Tesla (TSLA)Â stock plummeted 15.4%, posting the steepest drop of any S&P 500 constituent. On Monday, UBS analysts reduced their price target on Tesla stock, pointing to lower delivery expectations amid signs of softening demand for the company’s Model 3 and Model Y vehicles. In addition, Tesla reportedly saw a sharp year-over-year decline in February vehicle shipments in China, the world’s largest electric vehicle (EV) market. Tesla shares have lost more than a third of their value over the past month, suggesting a potential backlash to the political interventions of CEO Elon Musk.
Shares of Microchip Technology (MCHP), a manufacturer of microcontrollers and other semiconductor products, slid 10.6%. Last week, the chipmaker announced restructuring plans that included laying off around 2,000 employees as it navigates slumping demand, especially in the automotive end market. Between severance payments and other costs, Microchip anticipates restructuring expenses of between $30 million and $40 million.
Concerns about a potential economic downturn also weighed on other high-flying stocks in the tech sector. Shares of big data analytics software firm Palantir Technologies (PLTR), last year’s top-performing S&P 500 stock, dropped 11%, extending a string of recent losses. Beyond the uptick in economic uncertainty, discussions of defense spending cuts and sales by company insiders have contributed to the pressure on Palantir stock.
Regeneron Pharmaceuticals (REGN)Â shares jumped 5.3%, gaining the most of any S&P 500 stock on Monday. The uptick came after the biotechnology company reported positive results from a clinical trial of its product Dupixent for treating bullous pemphigoid, a rare autoimmune skin disorder. Regeneron developed Dupixent, which is already indicated for other skin conditions, through a global collaboration with French pharmaceutical firm Sanofi (SNY).
Shares of Virginia-based utility company AES Corp. (AES) advanced 4.7% following several positive mentions in financial media including CNBC’s “Mad Money.” The show’s host, Jim Cramer, highlighted AES stock for its strong dividend yield.
Fellow power generator NextEra Energy (NEE) received a boost after its top executive struck an optimistic tone about future power demand. According to Reuters, CEO John Ketchum said the company anticipates power demand to surge 55% in the next 20 years compared to the past two decades, with around 17% of the growth attributed to the expected artificial intelligence boom. NextEra shares ended 4.6% higher on Monday.