U.S. Equity Markets Tumbles by $4 Trillion; Tariff Disputes, Heightened Sell-offs Leaves the Investors Worried

The U.S. stock market on March 10 came under severe pressure amid ongoing tariff disputes and fears of recession.

All the major indices reported steep losses as sharp selloff continued to gain momentum throughout the session.

S&P is down by 8% from its all-time high on February 19, while Nasdaq Composite is in the correction territory after tumbling more than 10% from its December peak. The market lost trillions of dollars as economic uncertainty, recessionary scare and escalating trade tensions dampened investor sentiments. Tesla lost its market value by more than $125 billion in a single day. Moreover, Delta Air Lines cut their profit forecasts over uncertain economic conditions. Investors remain cautious as they are keeping a close watch on upcoming inflation reports, interest rate policies, and government's measures to stabilise the economy.

1.Why are the U.S. stock markets down?

The markets appear weak on the back heightened selloffs, which includes trade policy uncertainties, recessionary scare and overvalued stocks. Peter Orszag, CEO of Lazard explained, “The amount of uncertainty that has been created by the tariff wars with regard to Canada, Mexico and Europe is causing boards and C-suites to reconsider the pathway forward.”

2. How much has the market lost?

S&P has lost 8.6% from its February 19 high, wiping out more than $4 trillion in market value. Nasdaq Composite has fallen by 10% from its December peak.

3. Stocks that have hit the hardest

Tech stocks have reported severe losses in the recent sessions. Tesla fell by $125 billion on a single day, while Apple and Nvidia are down by 5%. In a nutshell, S&P 500’s technology sector dropped 4.3%.

4. Are the investors worried about recession?

Yes, recessionary concerns among investors have intensified.

In an interview on March 9, U.S. President Donald Trump described the current situation as “a period of transition” and didn't dismiss the possibility of a recession. When Trump was asked about the recession in a Fox News interview, he replied, “I hate to predict things like that. There is a period of transition because what we’re doing is very big.”

5. What are the factors considered by the investors?

Investors are keeping a close watch on several key factors, which includes the upcoming inflation report, Fed’s outlook on interest rates, and fiscal measures to stabilise the economy. Dan Coatsworth, an investment analyst at AJ Bell, said, “Many people have been worried about elevated valuations among US equities for some time and looking for the catalyst for a market correction.”

To manage the continuing risks, investors resort to asset diversification strategies.