US President Donald Trump’s tariffs have sent shockwaves through the stock market, wiping out nearly $4 trillion in value from the S&P 500 index since its record high on February 19. The benchmark index plummeted 2.7% on Monday, its biggest daily drop of the year, with the Nasdaq Composite sliding 4%, its largest one-day decline since September 2022.
The trade tensions between major trading partners like Canada, Mexico, and China have increased uncertainty for businesses, consumers, and investors, prompting a sentiment shift away from the Trump administration’s agenda. Delta Air Lines cut its forecast on growing economic uncertainty, while Tesla lost over $125 billion in value in one day.
Investors are now bracing for the impact of potential economic downturns and recession fears, with hedge funds reducing exposure to stocks at the largest amount in more than two years. The S&P 500 has given up all gains recorded since Trump’s November election, and its valuation remains significantly above historic averages.
The market’s reaction is a significant wake-up call for Wall Street, as investors reassess their expectations for the economy and the stock market. With the US government facing a partial federal shutdown, investors are also watching for inflation data on Wednesday.
Source: https://www.reuters.com/markets/us/investors-flee-equities-trump-driven-uncertainty-sparks-economic-worry-2025-03-10