Worries about the US economy along with looming tariffs torpedoed the surprise crypto rally.

Bitcoin surged following US President Donald Trump’s announcement on Sunday that his working group around digital assets would be pursuing a strategic reserve of Bitcoin, Ethereum, Cardano, Solana, and XRP.

However, after going from around $85,200 Sunday to $94,700 in the early Monday hours, Bitcoin had wholly retraced that move.

It‘s down 7.8% this year and is now trading around $86,233.

Ethereum, after pumping to around $2,550, had erased nearly all of its gains since Sunday and was back around $2,201.

They were joined by the rest of the market: The benchmark S&P 500 was down 1.8%, the Nasdaq was down about 2.2%.

The drop comes alongside rising inflation fears, Trump’s vow to levy tariffs on Mexico and Canada on Tuesday, and new geopolitical tension following his contentious meeting with Ukrainian President Volodymyr Zelenskyy on Friday.

Trump is scheduled to speak Friday at a crypto summit, the first, that will be chaired by crypto czar David Sacks.

Angst in markets kicked off with data on US manufacturing.

The Institute for Supply Management’s Purchasing Manager Index slipped in February, from 50.9 to 50.3. The index aggregates economic activity in manufacturing across the US including new orders and employment, among other metrics.

A signal below 50 on the index indicates a shrinking manufacturing sector.

The index can serve as a gauge for the US economy generally; construction spending counted for roughly $2.1 trillion in economic activity in the US in January, according to Census Bureau data.

Andrew Flanagan is a markets correspondent for DL News. Have a tip? Reach out to aflanagan@dlnews.com.