Market crashes as Trump’s trade policies worry investors

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Wall Street experienced a significant downturn on Monday as investors grappled with President Donald Trump’s economic policies and their potential consequences. The market’s main indicators showed substantial losses, with the S&P 500 declining 3.22% by late afternoon trading, while the Dow Jones Industrial Average dropped 1,042.76 points, representing a 2.44% decrease. The Nasdaq composite suffered an even steeper fall of 4.59%.

The recent market volatility has been characterized by dramatic swings, with the S&P 500 experiencing significant movements of over 1% in seven out of the last eight trading sessions. Since reaching its peak on February 19, the index has declined by 8.7%, largely due to uncertainties surrounding Trump’s shifting stance on tariffs.

Market participants are increasingly concerned about the direct economic impact of these fluctuations and their potential to create a paralysis in business and consumer activity. Economic indicators have already shown signs of weakness, particularly in sentiment surveys, while the Federal Reserve Bank of Atlanta’s indicators suggest the possibility of an economic contraction.

BREAKING: A bloodbath today, with over $1.9 trillion wiped out from the stock and crypto markets.

This is the largest market drop since March 2020, when the pandemic sparked a historic crash. pic.twitter.com/vVAvnzZmEj

— Jacob King (@JacobKinge) March 10, 2025

“I hate to predict things like that. 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,” Trump responded to Fox News Channel when questioned about the possibility of a recession in 2025, adding, “It takes a little time. It takes a little time.”

Despite current stable employment figures and robust economic performance at the end of the previous year, economists are revising their growth projections downward. Goldman Sachs analyst David Mericle has reduced his forecast for U.S. economic growth from 2.2% to 1.7% by the end of 2025, primarily due to increased tariff expectations.

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

Technology sector stocks have been particularly affected by the market turbulence. Nvidia’s value dropped an additional 5.4%, bringing its year-to-date losses to 20%. Tesla faced even steeper declines, falling 14.2% and extending its 2025 losses beyond 40%. The company’s association with Elon Musk and recent protests against government workforce reduction efforts have impacted its performance.

Consumer-dependent sectors also experienced significant declines, with United Airlines and Carnival Cruise Line falling 8.4% and 8.7% respectively. The cryptocurrency market hasn’t been spared either, with Bitcoin’s value falling below $80,000 from its December peak of over $106,000.

⚠️An absolutely UGLY start to the week for US stocks.

Magnificent 7 recorded $830 billion market cap loss, the most EVER and down $3.3 TRILLION since the peak.

RECESSION fears are real.

The S&P 500 is the most overbought since the 2020 CRASH.

Performance today:

S&P 500 -2.7%… pic.twitter.com/9usUWZZIcx

— Global Markets Investor (@GlobalMktObserv) March 10, 2025

Investors have sought refuge in U.S. Treasury bonds, driving yields lower. The 10-year Treasury yield decreased to 4.22% from 4.32%, continuing its decline from January’s near 4.80% levels.

Despite the market uncertainty, merger and acquisition activity continues. Redfin’s stock surged 63.7% following Rocket’s announcement of a $1.75 billion all-stock acquisition offer, though Rocket’s own shares declined by 17.3%. ServiceNow’s stock fell 8.1% after revealing plans to acquire Moveworks for $2.85 billion.

International markets also reflected the negative sentiment, with European indices declining and Asian markets showing mixed results. Hong Kong’s market fell 1.8%, while Shanghai’s index dropped 0.2%, following reports of falling consumer prices in China, indicating continued economic challenges in the world’s second-largest economy.