US Markets Crash: Nasdaq Tanks 6%; Trump’s Tariff Plan Wipes Out $2 Trillion in Market Capitalisation

Poonam Sharma

On Thursday, April 3, US stock markets faced a dramatic collapse, with President Donald Trump’s controversial tariff policies driving a massive sell-off across Wall Street. The Dow Jones Industrial Average plunged by over 1,550 points, nearing correction territory, marking a 10% drop from its peak. The S&P 500 lost 4.4% of its value, and the Nasdaq Composite saw a more significant drop, losing more than 6%, shedding almost 1,000 points during the volatile intraday trading.

The effects of Trump’s tariffs were not limited to the equity markets. The US Dollar, initially expected to benefit from the president’s trade measures, extended its losses, falling below 102 on the Dollar Index. The Cboe Volatility Index, a measure of market uncertainty, spiked to levels unseen in recent months, crossing 27. The yield on the US 10-year Treasury bond fell to 4.03%, signaling further investor apprehension.

While the US Dollar’s decline amid this global sell-off has raised questions about its status as a safe-haven asset, there is growing concern about whether the economy is on the brink of a downturn. The US Treasury market, along with major currencies like the yen and the euro, has seen increasing bearish bets from hedge funds, anticipating heightened volatility in the second half of the year.

In the cryptocurrency market, Bitcoin fell by 4.5%, and Ethereum dropped 6%. Oil prices also suffered, with West Texas Intermediate crude falling 7.1% to $66 a barrel. Gold, which had been climbing toward record highs, also saw a significant correction, as investors booked profits after prices neared $3,200 an ounce.

The biggest losses were observed in companies with heavy exposure to global supply chains. Major corporations such as Apple, Nike, and Walmart saw substantial drops in stock prices. Analysts warned that if these tariffs remain in place, it could severely slow the global economy, potentially leading to a recession.

Mary Ann Bartels from Sanctuary Wealth stated, “This is the worst-case scenario for tariffs, and it wasn’t fully priced into the markets. If these tariffs stay, the economy will slow down. Whether it leads to a recession or not, the global economy is heading for a slowdown, and there’s no safe place to hide except in fixed-income markets.”

Technical analysts are now focusing on the S&P 500, which is at risk of staying below the psychological 5,500 mark. If this threshold is broken, there may be little support to attract investors, further intensifying the market downturn.

The market turmoil on April 3 served as a sharp reminder of the risks associated with sweeping trade policies and the interconnectedness of the global market.