Continuing its losing streak, the US stock market witnessed a sharp sell-off on Monday. As the major indices plunged, investor concerns over trade tensions and fears of an economic slowdown intensified.
The S&P 500 fell by 2.7%, hitting its lowest level since September. The tech-heavy Nasdaq Composite dropped 4%, its worst single-day decline since September 2022. Notably, the Dow Jones Industrial Average lost nearly 900 points, thereby slipping below its 200-day moving average for the first time since November 2023. The current development in the market has created fears of a recession in the US, with ripple effects likely to be felt across global markets, including India.

What’s Fueling the US Market Crash?

Trade War

One of the key factors behind the market turmoil is the escalating trade war between the US and China. Ever since Trump has come to power, he has waged a trade war. His decision to raise tariffs on Chinese imports from 10% to 20% has triggered retaliatory measures from Beijing, which imposed a 15% tariff on US goods, particularly agricultural products. Let us not forget that he is engaged in a tariff war even with allies. This has raised concerns about rising inflation and slower economic growth.