US President Donald Trump’s aggressive trade policies have rattled global markets, and now they seem to be shaking up Wall Street as well.
Major indices like the S&P 500, Nasdaq, and Dow Jones tumbled in the overnight trading session. The stock market crash was so intense that it ended up wiping out $4 trillion from the S&P 500’s peak last month. Big tech stocksMicrosoft, Apple, Tesla, Metawere the worst hit.
The massive sell-off was triggered by Donald Trump’s recent remark on the possibility of a US recession in 2025. When asked about a possible recession this year, Trump responded, “I hate to predict things like that.” That was enough to send Wall Street into a tailspin.
But is a US recession actually looming? Experts say it’s too soon to tell.
“Markets have a lot of expectations from the Trump administration. But given the decisions they’re taking, it is working in the opposite direction for the US market,” said Kranthi Bathini, director of equity strategy at WealthMills Securities.
However, on the question of a recession, he said, “It’s premature at this point in time. There is no concrete evidence that points to a recession. The US administration knows how to avoid one.”
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, blamed the turmoil on Trump’s “flip-flop tariff policy and the high uncertainty.”
“The S&P 500 and Nasdaq declining by 2.6% and 4% respectively, yesterday is the market’s response to Trump’s tariffs and the possibility of a US recession by the year-end. We will have to wait and watch how the situation develops,” he said.
Trivesh D., COO of Tradejini, pointed out that multiple factors triggered the sell-off, but tariffs remain the biggest issue. “The primary concern has been the ongoing back-and-forth tariff announcements, which have unsettled investors and further dampened market sentiment. Concerns about a possible economic slowdown or even a recession have added to the turmoil, with the technology sector being the most affected,” he said.
While experts have suggested that a recession may not be on the cards, they agreed that Trump’s “period of transition” could negatively impact the US economy in the near term.
“With Trump firm on imposing reciprocal tariffs starting in April, volatility is expected to remain elevated despite near-term risks,” Trivesh added.