US stock markets experienced a significant decline on Monday as investors grew anxious about the economic implications of President Donald Trump's tariffs. The S&P 500 fell by 2.7%, the Dow Jones dropped 2%, and the Nasdaq decreased by 4%, with major tech companies like Tesla, Nvidia, and Amazon enduring considerable losses. Trump's recent remarks about the US being in a "period of transition" heightened fears of economic uncertainty, leading government officials to attempt to reassure investors.

In Asia, stocks initially plummeted on Tuesday but later regained some ground, with Japan’s Nikkei 225 ending 0.6% lower and South Korea’s Kospi down 1.3%. Analysts indicate that worries about a possible trade war and slowing economic growth are causing market fluctuations. While some experts caution about the risks of recession, Trump's advisors contend that tariffs are bolstering the economy by drawing jobs and investments back to the US.

Economists note that investors are recalibrating their expectations after initially anticipating tax cuts and deregulation under Trump. With both businesses and consumers displaying signs of caution, market observers remain split on whether these apprehensions will result in a prolonged economic downturn or a recovery.