A major stock market index has now officially dipped into "correction" territory, reported The New York Times on Thursday — the latest bad news for the Trump administration following weeks of instability and uncertainty from investors.
"On Thursday, the S&P 500 fell 1.4 percent. After weeks of selling, the index is now down 10.1 percent from a peak that was reached less than one month ago and is in a correction — a Wall Street term for when an index falls 10 percent or more from its peak, and a line in the sand for investors worried about a sell-off gathering steam," reported Joe Rennison and Danielle Kaye.
The reporters noted that "other major indexes, including the Russell 2000 and the tech-heavy Nasdaq Composite, had already fallen into correction before Thursday."
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Investors have been spooked in recent weeks about President Donald Trump's escalating trade war, as well as the effects of the Department of Government Efficiency task force as it lays off the federal workforce in droves and shrinks the public sector.
In particular, noted the report, stock traders are fearful that all of this chaos "is causing consumers to spend less and discouraging businesses from investing. That reticence could drive the economy into a downturn, forcing investors to re-evaluate company valuations."
Trump himself has repeatedly refused to rule out a recession this year when asked about the possibility — a sharp turnaround from his promises of economic growth on the campaign trail. Members of his administration are refusing to back down from their position, with Commerce Secretary Howard Lutnick saying Trump's sharp tariffs on Canada and Mexico are "worth it" even if they are directly responsible for a recession.