US stocks plummeted sharply in recent days, sparking concerns of a potential market crash under President Donald Trump’s leadership. The S&P 500 has lost 15% since Inauguration Day, with the Nasdaq already crossing the 20% threshold for a bear market. This is the earliest such event in modern history.
Trump’s tariffs have taken the bull stock market and are on the verge of turning it into a bear faster than any president has overseen. The current market wipeout hit a crescendo after Trump’s “Liberation Day” event, where he shocked investors by promising to increase tariffs at an unprecedented pace. Two-thirds of the 15% fall in the S&P 500 has occurred since Liberation Day.
Experts warn that the situation is particularly unique due to the pre-existing market conditions. President George W. Bush took office with a declining market, but Trump inherited a bull market and exacerbated it with his tariffs. The recent market’s plunge alone isn’t unique, but what happened before the plunge makes it special.
The National Bureau of Economic Research will likely decide whether a recession has occurred by the end of the year. Some forecasts predict real GDP will plummet, falling below zero for quarter 1 of this year. The median loss for the S&P 500 during a recession is 27%. Confidence in the economy is fragile, and the steep market selloff could spook CEOs and consumers alike.
The economic implications of Trump’s tariffs are far-reaching, with more than three-in-five Americans involved in the stock market. “Wall Street is Main Street,” says Ed Yardeni, as companies facing massive disruptions due to Trump Tariffs 2.0 struggle to stay afloat. The situation could become a nasty cycle, with stocks falling further if investors believe a recession is on the way.
Source: https://edition.cnn.com/2025/04/07/investing/stock-market-trump-tariffs/index.html