Trump's reciprocal tariff erodes $6.6 trillion in market value

U.S. markets took a massive hit last week as President Donald Trump’s latest tariff announcements sparked a sharp sell-off, leading to one of the biggest market crashes in American history. In just two trading sessions—Thursday and Friday—Wall Street lost a staggering $6.6 trillion in value. Since January 17, ahead of Trump’s second term inauguration, the total market cap loss has exceeded $11 trillion.

The Dow Jones Industrial Average tumbled 5.5% on Friday, following a 4% drop the day before. The S&P 500 fared even worse, plunging 5.97% after Thursday’s 4.84% slide. The tech-heavy Nasdaq Composite also sank 5.73% on Friday, adding to Thursday’s 5.97% fall.

Investors are rattled by fears that an escalating trade war could push both the U.S. and global economies toward a recession. This sentiment was further shaken by Federal Reserve Chairman Jerome Powell, who expressed concern that the tariffs could fuel inflation and slow down economic growth. Powell also suggested the Fed would hold off on any rate hikes until the impact of the tariffs becomes clearer.

India’s Dalal Street: What Lies Ahead?

Back home, all eyes are on the Indian markets as the coming week is packed with crucial economic triggers. Ajit Mishra, SVP of Research at Religare Broking, said global investors will be closely watching tariff developments, especially given their ripple effects across emerging markets.

The Reserve Bank of India’s Monetary Policy Committee is set to announce its policy decision on April 9. This will be followed by key macroeconomic data releases, including the Index of Industrial Production (IIP) and Consumer Price Index (CPI) on April 11. The Q4 earnings season also kicks off, with TCS set to report results on April 10.

Mishra suggests traders stick to a “sell on rise” strategy for the Nifty until there’s either a clear trend reversal or a retest of the 22,100 support level. With earnings season underway, stock-specific action is expected to dominate, offering both long and short-term trading opportunities.

Banking and financial stocks remain relatively strong and could continue to attract investor interest. However, given the heightened volatility, Mishra recommends caution and hedging long positions through index puts.

Despite near-term jitters, there are some positives for Indian equities in the medium term. A sharp correction in global commodity prices and a dip in local bond yields could offer some relief, according to a note from SBI Securities.