U.S. Stocks Plunge 14.9% as Trump Tariffs Spark $3 Trillion Loss

The U.S. stock market endured its most tumultuous week in five years, with a staggering $3 trillion in market value vanishing. This dramatic downturn was set off by President Trump's announcement of tariffs that surpassed market expectations, igniting worries about the global economic outlook. The Dow Jones Industrial Average tumbled 14.9% from its peak, while the S&P 500 index declined by 17.4%. The Nasdaq Composite, which had reached a record close on December 16, 2024, plummeted 22.7%, officially entering a bear market. The total market capitalization loss for U.S. stocks exceeded $3 trillion.

The uncertainty surrounding the tariffs and their potential impact on monetary policy exacerbated the market's volatility. Federal Reserve Chairman Jerome Powell acknowledged the high level of uncertainty, stating that both unemployment and inflation risks were rising. Powell did not provide immediate answers on how the tariffs would affect the Fed's policy, further fueling market anxiety.

Market participants were left grappling with the magnitude of the sell-off, as buyers seemed to be in short supply. Market strategists noted that investors were cautious, waiting to see the initial outcomes of trade negotiations and retaliatory measures. The lack of clarity on how much of a decline would be considered "sufficient" added to the market's unease.

The impact of the U.S. market turmoil was not confined to domestic borders. Stock markets in other parts of the Americas also felt the ripple effects. Canada's main stock index confirmed it had entered a correction phase, closing more than 10% below its January 30 record high. Argentina's main stock index fell 7.4% at its preliminary close, while Mexico and Brazil's main indices declined by more than 5% and 3%, respectively.