Stocks took a sharp dive as investors reacted to uncertainty surrounding President Donald Trump’s tariff policies and economic outlook. The Dow dropped 890 points, or 2.08%, while the S&P 500 fell 2.7% and the Nasdaq plunged 4%, marking the worst trading day of the year for the major indexes.

Concerns over tariffs played a significant role in the selloff, with Trump recently increasing tariffs on Chinese imports and threatening new trade restrictions on Canada and Mexico. In an interview, Trump acknowledged a “period of transition” for the economy but did not rule out a potential recession. Tech stocks bore the brunt of the market downturn, with Tesla plummeting 15.4%, while Nvidia and Palantir also suffered steep losses. Wall Street’s fear gauge surged to its highest level of the year as investors sought safe-haven assets, pushing bond yields lower.

With inflation data expected later this week, traders remain cautious about the economic outlook and the potential long-term effects of shifting trade policies.