Economic pain is beginning to be felt as markets are being rattled by the turmoil of on-again, off-again tariff decisions.
Stocks started the week going down, down, down in the burning ring of fire when Monday selloffs saw market indexes – the Dow Jones Industrial Average, NASDAQ and S&P 500 – all fell by double digits.
Markets are just one indicator of the economic fortunes of the nation, also including gross domestic product or GDP numbers, unemployment numbers and consumer spending – among other indicators.
President Donald Trump on Sunday on Fox News in an interview did admit the nation might feel the pain of economic losses as tariffs take effect against Canada, China and Mexico.
His policy on tariffs have swung wildly since his inauguration – going from implementation to delay and back again in the span of weeks. Administration officials and supporters have made several claims as to why the tariffs are being used – from trying to cut off Fentanyl from crossing into the United States from the northern and southern borders, to encouraging investment in American manufacturing and industry for consumer goods and services that have for decades during globalization been sourced from abroad.
As of Tuesday at 11:30 a.m., the market indexes started with selloffs – with the Dow Jones Industrial Average still down more than 400 points as sellers outnumbered buyers of stocks on the New York Stock Exchange as the trading morning continued. The S&P 500 was down 20 points but gaining, while the Nasdaq was back in positive territory by 40+ points heading into the lunch hour.
Elon Musk’s Tesla was among those taking huge hits in value in trading in recent days, but was beginning to rally this morning with an uptick of $7+ in value.
What’s with all the stock talk?
The market indexes are typically seen by Americans as the face-value indicator of a healthy economy, especially as investment in stocks, bonds and other trading products has increased in the decade following the Great Recession.
Stocks are valued based on the overall number of issues (individual stock certificates) that are being traded on the market. For instance – Tesla, which has 86 million shares in total available to the public – is worth $229 a share (and change) as of this morning. Those shares fluctuate in value based on who is buying and selling shares at any given time. Essentially, this is the best way to explain it: If there are more buyers in the market than sellers of the company’s shares during the trading day, the price of each share gains in value since it is a limited commodity within the overall market. When there are more sellers than buyers, the stock goes down since the amount of shares available has gone up. The value of a company on the market is tied to their share price: a single share’s value times the overall number of shares that are made publicly available equals a company’s value on the market.
So for example: Tesla has 86 million total shares, and multiplied by its value as of writing at $229 a share equals $19.6 billion (give or take) in overall value on the market of the company.
Companies can use this evaluation to take out loans for further investment into the business, for instance, allowing it to continue to grow. So long as the value of the stock held by the company continues to increase, the amount of money they can potentially access increases as well.
Here’s where the stock market going up and down makes the difference: company valuations – especially those building things like cars, appliances, planes and products that cost more – then have to raise prices to make up for shortfalls on paying back loans, investors and employees in the process.
Downturns in the stock market are used as indicators of negative growth, and turmoil in the markets are the warning signs of trouble in the overall fortunes of the global economy. Since companies usually begin pulling back from future projects and opportunities to ensure that shareholders continue to receive returns on their investment – or dividends on their stock value – instead of keeping plans in line as concerns grow over long term spending by those holding the purse strings in organizations across the world.
When losses begin to pile up on the market and the value of a publicly-traded company begins to fall, those are usually followed on by employee layoffs and curtailing of products and services offered as they adjust as well. The stock market also can be an emotional vehicle of economic growth, rapidly changing with the news on decisions made by political leadership in countries across the world.
Promises, promises
President Trump during his campaign and inauguration promised prosperity during his second term in office – and falling prices on consumer goods on grocery store shelves – which haven’t borne fruit during the first days in office.
Egg prices have increased, tough talk on tariff has seen Canada taking a hard line and China increasing their own tariffs on agricultural products imported from the United States. The markets in the past two months erased all the gains they made from Election Day in November through the beginning of 2025 as a result, and investors are concerned about decreasing consumer spending and future job losses on the heels of increased tariffs.
The President has touted expansion of manufacturing returning to American soil in past days, and mainly blamed the previous administration for the woes felt on Wall Street now because the economic fortunes during the Biden presidency have caused problems aplenty for Americans in the opening days of his administration.
When on Fox News on Sunday in an interview with Maria Bartolomo, President Trump admitted that the United States might experience a recession as the economy readjusts to his America-first policies.
Check back for more on the economy in the coming days as conditions continue to evolve in the stock market and elsewhere.
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