The US stock market has suffered significant losses in recent days. As a result of Donald Trump's tariffs and trade policies, investors became worried and began to sell their stocks in a hurry. This, in turn, led to a decline in the stock market. As a result, the S&P 500 index fell by $ 4 trillion from its peak last month.
The impact of tariffs on the market
The new tariffs introduced by the Trump administration have had a negative impact on international trade relations. This has especially increased tensions in relations with major economic partners such as Canada, Mexico and China. Investors have been cautious and rushed to sell their stocks due to these uncertainties.
According to Ayako Yoshioka, an expert at Wealth Enhancement, Trump's tariff policy has weakened market confidence and increased uncertainty among investors. This, in turn, led to a sharp decline in shares of technology and industrial companies.
Big stock market losses
- The S&P 500 index fell 2.7%, recording its biggest daily loss of the year.
- The Nasdaq Composite fell 4%, recording its biggest drop since September 2022.
- Tech companies: Major technology giants such as Microsoft (-3.35%), Google (-4.66%), Apple (-4.87%), and Nvidia (-5.05%) also suffered significant losses.
- Tesla shares fell 15.53%, significantly reducing the company's market value.
A heatmap showing the overall state of the US stock market.
The market decline also forced major corporations such as Delta Air Lines to revise their profit forecasts. Its shares fell 14% after the company halved its first-quarter earnings forecast.
Trump and market concerns
Donald Trump tried to avoid making any specific predictions about a possible economic crisis over the weekend. However, the market declines and investors' concerns about uncertainty indicate that his trade policy is related.
Trade tensions with China are understandable, but tariff disputes with Canada, Mexico and Europe have taken a serious toll on market sentiment. As Lazard CEO Peter Orzag noted, if these issues are not resolved soon, they could seriously damage the US economic outlook and mergers and acquisitions (M&A) activity.
Investors’ next steps
Analysts say that the depressed sentiment in the stock market could slow economic growth and affect the size of gross domestic product (GDP). Investors are also closely watching the inflation report due on March 12. If inflation is high, the market decline could be even more pronounced.
As Ross Mayfield, an investment strategist at Baird, noted, the Trump administration is pursuing a rather aggressive policy in terms of influencing the stock market. This could be a serious warning signal for Wall Street.
The increase in tariffs, trade conflicts and economic uncertainty have put the US stock market under serious pressure. Investors are watching how the situation develops and acting cautiously. If trade disputes are not resolved soon, this could also cause major problems for the global economy.
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