The U.S. stock market witnessed its most significant single-day plunge since the COVID-19 pandemic, shedding an estimated $2.5 trillion in market value following President Donald Trump’s announcement of aggressive new trade tariffs.
The move, aimed at correcting what the president termed “persistent global trade imbalances,” sent shockwaves through Wall Street and global financial markets, triggering widespread investor anxiety and flight to safe-haven assets.
According to data from major exchanges, the S&P 500 Index dropped by 4.8%, marking its largest daily loss since June 2020. The index’s sharp fall pushed it into what analysts call a technical correction, which occurs when a stock or index falls at least 10% from its recent peak.
The Nasdaq 100, heavily dominated by technology stocks, saw an even more dramatic dip of 5.4%, the worst performance since September 2022. High-profile tech giants were among the worst hit—Apple shares dropped 9%, while Nvidia and Tesla also suffered considerable losses.
Particularly hard-hit were sectors reliant on foreign manufacturing, especially apparel and footwear, after the new tariffs targeted countries such as Vietnam and Indonesia, which serve as key supply chain hubs for American retailers. Nike’s stock fell sharply by 14%, while other consumer brands like Lululemon, Gap, and Abercrombie & Fitch also faced steep declines.
President Trump’s newly announced tariff plan includes a 10% tax on all U.S. imports and even steeper levies on goods from approximately 60 countries. According to trade experts and economists, this represents the most comprehensive and aggressive trade move by the U.S. in over a century.
The objective is to narrow the country’s trade deficit, but the abrupt implementation and broad scope of the tariffs have unsettled investors.
Smaller-cap stocks, typically more vulnerable to macroeconomic disruptions, bore the brunt of the selloff. The Russell 2000 Index, which tracks these companies, plummeted 6.6%, officially entering bear market territory after losing more than 20% from its 2021 peak.
As panic selling set in, traders moved their capital to traditionally safer assets like U.S. Treasury bonds, the Japanese yen, and gold.
The Cboe Volatility Index (VIX), widely seen as Wall Street’s fear gauge, surged to 30, the highest level recorded in 2025 thus far, highlighting growing investor uncertainty.
With investor sentiment already rattled, attention is shifting toward the upcoming March jobs report, which will be released on Friday. This will be the first significant economic indicator for the second quarter and could heavily influence bond yields, equity valuations, and Federal Reserve policy direction. Should the report show signs of weakness in the labor market, it could reinforce recession fears and spark further market turbulence.
Analysts are also closely monitoring scheduled remarks by Federal Reserve Chairman Jerome Powell, who is expected to speak later in the week. Market watchers will be looking for any indication that the Fed might adjust its monetary policy strategy in light of the escalating trade tensions and potential ripple effects across the broader economy.
In summary, the U.S. stock market’s sharp downturn reflects mounting concerns over the broader implications of the newly imposed tariffs. While the administration aims to protect domestic industries and rebalance trade, the sudden policy shift has amplified volatility and raised alarms over possible long-term impacts on global economic stability.
