Investors pull back from risk assets as JPMorgan raises recession probability to 40%

The S&P 500, Nasdaq, and Dow Jones Industrial Average experienced significant declines this week.

Crypto and tech stocks saw a sharp decline on March 10 as recession fears escalated, despite White House efforts to ease concerns.

JPMorgan raised its 2025 recession probability to 40%, up from 30%, citing extreme U.S. policies as a significant risk, according to The Wall Street Journal. Goldman Sachs also increased its 12-month recession estimate to 20%, warning that it could rise further if the Trump administration stays firm on its policies despite worsening economic data.

Morgan Stanley revised its economic outlook, cutting 2025 GDP growth projections to 1.5% and 2026 estimates to 1.2%, while also raising inflation expectations.

Despite these warnings, White House economic adviser Kevin Hassett remained optimistic, telling CNBC on March 10 that there were strong reasons to be bullish about the economy, though he acknowledged short-term fluctuations.

In a March 9 Fox News interview, President Trump described the current economic situation as a “period of transition.”

Meanwhile, blockchain betting platform Polymarket humorously noted that recession odds are "the best-looking chart in finance right now."

Source: Polymarket

Tech Stocks and Crypto Sell-Off

The “Trump bump” has faded, with the S&P 500 now trading below its level before his November 5 election victory.

The index has dropped nearly 10% from last month’s peak, while the Nasdaq has officially entered correction territory, plummeting 14% in just three weeks.

The Nasdaq has lost almost 10% this year. Source: Google Finance 

US Stock Markets Plunge

On March 10, all major US stock indices closed in the red. The S&P 500 tumbled 2.7% to its lowest point since September, while the tech-heavy Nasdaq endured its worst single-day decline since 2022, dropping 4%. The Dow Jones Industrial Average also fell nearly 900 points, marking a 2.1% decline.

The "Magnificent 7" — the leading US tech firms — had a rough start to the week, collectively losing over $750 billion in market capitalization in a single day. Tesla suffered the most, plummeting 15% and securing its place as the worst-performing stock in the S&P 500 for the year.

Other major tech companies also saw significant losses:

• Nvidia declined 5.1%
• Apple fell 4.9%
• Meta dropped 4.4%
• Alphabet slipped 4.5%

Crypto markets have also taken a significant hit, reaching their lowest levels since early November. On March 11, the total market capitalization dropped by 7.5% to $2.6 trillion, wiping out approximately $240 billion from the space.

Crypto market cap declines 1 month. Source: CoinMarketCap

Bitcoin (BTC) has also breached key support levels, plunging 4% in a day to reach $76,784 before slightly rebounding to $79,000 at the time of writing.