S&P 500 Drops 1.5% Amid Recession Fears, Nasdaq 100 Falls 1.3%

On March 12, the S&P 500 Index experienced a significant intraday decline of 1.5%, marking a 10% drop from its peak on February 19. This decline has positioned the index on the brink of its first technical correction since the end of 2023. The sell-off was driven by growing investor concerns about an impending economic downturn, leading to a shift away from risk assets towards safe-haven investments.

The tech-heavy Nasdaq 100 Index also saw a notable decrease of 1.3%, entering a pullback phase as early as March 7. Market analysts, such as Adam Sarhan, founder of 50 Park Investments, attributed this shift to a combination of factors, including the unwinding of the 'Trump Trade' and broader concerns about future economic growth and potential recession. The market sentiment has been rapidly deteriorating in recent weeks as economists have revised their growth expectations downward, citing the possibility of an intense trade war outbreak.

U.S. President Trump, in an interview, acknowledged that the U.S. economy is in a "transition period" and did not rule out the possibility of a recession. This statement further fueled market uncertainties, contributing to the sell-off. The downturn in stocks continued during Asian trading hours, with regional markets opening lower following the S&P 500's worst day of the year. The Nasdaq Composite officially entered correction territory, experiencing a pullback of at least 10% from its previous peak.

The S&P 500 recorded its worst week since September 2024, with the SPDR S&P 500 ETF Trust losing 3.4% in the week. The index had its biggest one-day drop since December 18, and the tech-heavy Nasdaq slid 4.0%, marking its biggest single-day percentage drop since September 2022. The S&P 500 is now 8.6% below its record closing high reached less than a month ago, while the Nasdaq has dipped more than 10% below its record closing high touched on December 19, confirming that it has been in a correction since then.

The bellwether S&P 500 closed below its 200-day moving average, a closely watched support level, for the first time since November