A historic stock market crash has rattled investors after President Donald Trump announced sweeping new tariffs, igniting fears of a global recession. Wall Street suffered its worst day since the COVID-19 pandemic, with sharp declines across all major indexes.
Worst Stock Market Crash Since COVID-19
The crash marks the biggest single-day losses for U.S. markets in nearly five years. The Dow Jones Industrial Average plunged 1,679 points, or 3.98%, while the S&P 500 shed 4.84%, returning to correction territory. The Nasdaq fared even worse, dropping nearly 6%, its steepest fall since March 2020.
This sudden stock market crash triggered widespread panic, wiping out trillions in value and driving investors to safer assets like Treasury bonds. More than 400 S&P 500 stocks posted losses, highlighting the scale of the financial upheaval.
Tariff Bombshell Sparks Economic Jitters
At the center of the crisis is Trump’s aggressive “Liberation Day” tariff strategy. The new policy imposes a baseline 10% tariff on all countries, with higher rates for specific trading partners: 20% for the European Union, 25% for South Korea, and 24% for Japan. China faces an effective rate of 54%, factoring in prior penalties.
The White House insists the tariffs are designed to correct decades of unfair trade practices. “The markets are going to boom,” Trump claimed. “This is like an operation — painful, but it will heal us.”
However, analysts say the announcement blindsided markets, pushing investors into panic-selling mode and sparking the most dramatic stock market crash in years.
Investors React With Fear And Flight
Multinational companies and retailers were among the hardest hit. Nike tumbled 14%, Apple lost 9%, and Five Below collapsed nearly 28%. Tech giants weren’t spared either—Nvidia dropped 8% and Tesla fell over 5%.
The uncertainty surrounding Trump’s trade policies also shook market confidence. Traders had expected a capped 10% tariff at most, but the scope and scale of the final package exceeded predictions. Investors responded by retreating to the bond market, with 10-year Treasury yields falling to 4%.
Rising Recession Fears Add Fuel To Collapse
Economists are now warning that the stock market crash could mark the start of a recession. JPMorgan analysts said a prolonged trade war, coupled with slowing economic indicators, may push the U.S. economy into contraction.
“This is the worst-case scenario,” said Mary Ann Bartels of Sanctuary Wealth. “If support levels don’t hold, we could see another 5–10% drop in the coming weeks.”
Will The Market Recover — Or Sink Further?
Trump continues to downplay the stock market crash, insisting that the new tariffs will bring in trillions in revenue and force global partners to negotiate fairer deals. But many economists remain skeptical, arguing that the administration underestimated the economic damage these policies would unleash.
As the market reels, the question now is whether Trump’s strategy will deliver the promised long-term gains — or leave behind a deeper financial crisis. Investors are bracing for more volatility in what is shaping up to be the most unstable economic period since the pandemic-era crash.
