Tesla stock hit hard as market drops

NEW YORK - Elon Musk’s Tesla deepened its loss for 2025 on Monday, following an initial post-election bump on hopes that Musk’s close relationship with President Donald Trump would help the electric vehicle company.

Tesla stock drops

By the numbers:

Tesla shares tumbled 15.4%, to $222.15. That's the lowest Tesla shares have traded since late October.

The stock has since slumped, in part, on worries that its brand has become intertwined with Musk. 

Protests against the U.S. government's efforts to cull its workforce and other moves have targeted Tesla dealerships, for example.

Some Tesla investors may also be concerned that Musk isn’t committing enough time to the company in his CEO role.

The billionaire entrepreneur was tapped by Trump to oversee the Department of Government Efficiency (DOGE) with a mission to reduce wasteful spending and "maximize governmental efficiency and productivity."

RELATED: Elon Musk serving as 'special government employee' – what does that mean?

Stock market drops

By the numbers:

The S&P 500 fell 2.7% Monday, coming off its worst week since September. The Dow Jones Industrial Average dropped 2.1%, and the Nasdaq composite sank 4%. 

The main measure of the U.S. stock market went through its seventh swing of more than 1%, up or down, in the last eight days following a stretch dominated by Trump’s on -and- off -again tariffs. 

The worry is that the whipsaw moves will either hurt the economy directly or create enough uncertainty to drive U.S. companies and consumers into an economy-freezing paralysis. The S&P 500 is down 8% from its all-time high set on Feb. 19.

Is the economy weakening?

Big picture view:

The economy has already given some signals of weakening, mostly through surveys showing increased pessimism. 

And a widely followed collection of real-time indicators compiled by the Federal Reserve Bank of Atlanta suggests the U.S. economy may already be shrinking.

Meanwhile, in a FOX News interview, Trump responded to a question about the possibility of a recession.

"I hate to predict things like that," Trump said. "There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing." 

He then added, "It takes a little time. It takes a little time."

The U.S. job market is still showing stable hiring at the moment, to be sure, and the economy ended last year running at a solid rate. But economists are marking down their forecasts for how the economy will perform this year.

What they're saying:

At Goldman Sachs, for example, David Mericle cut his estimate for U.S. economic growth to 1.7% from 2.2% for the end of 2025 over the year before, largely because tariffs look like they’ll be bigger than he was previously forecasting.

He sees a one-in-five chance of a recession over the next year, raising it only slightly because "the White House has the option to pull back policy changes" if the risks to the economy "begin to look more serious."

"There are always multiple forces at work in the market, but right now, almost all of them are taking a back seat to tariffs," according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.