$4 Trillion Wiped from US Markets as Trump's Tariff Policies Fuel Investor Panic

Last week, the US stock market has taken a massive hit, shedding $4 trillion in market value as President Donald Trump's aggressive tariff policies continue to rattle investors. Several major companies have seen their stock prices tumble as fears of a looming recession mount. However, Trump has dismissed concerns, insisting that his economic strategy is laying a 'tremendous foundation for the future'.

'We're Bringing Wealth Back to America'

During an interview on Fox News Channel's Sunday Morning Futures, Trump defended his decision to impose—and then temporarily suspend—25% tariffs on imports from Mexico and Canada, a move that sent markets tumbling.

'There is a transition period because what we're doing is very big. We're bringing wealth back to America, and that's a big thing,' Trump claimed.

When asked whether his administration was expecting a recession this year, Trump sidestepped the question, instead remarking, 'I hate to predict things like that. There is a transition period because what we're doing is very big... You can't really watch the stock market.'

The president also revealed plans to revive the US shipbuilding industry, claiming that the country had stopped producing its own ships.

'What we're doing is we're building a tremendous foundation for the future... You just saw one of the biggest shipbuilders in the world in the Oval Office... He's announcing a $20 billion investment in the United States,' he stated.

Market Meltdown: Investors Sound the Alarm

Despite Trump's reassurances, the US stock market continues to spiral, with major indices suffering sharp declines. The S&P 500 has fallen 8.6% from its February peak, teetering on the edge of correction territory, while the Nasdaq Composite has plunged over 10%.

The benchmark S&P 500 dropped 2.7% on Monday, its largest daily decline of the year. Since its record high on 19 February, the index has shed over $4 trillion in market value and is now approaching a 10% correction.

Tech stocks have been hit the hardest, with Tesla and Nvidia suffering significant losses. The Dow Jones Industrial Average also tumbled nearly 900 points, reflecting mounting investor anxiety over escalating trade tensions and the broader economic outlook.

• Nvidia's stock fell 5% last Monday, deepening its losses to 23% since 19 February.
• Tesla shares dropped 14%, bringing their total decline to 37% over the same period.
• Apple, Alphabet (Google's parent company), and Meta (Facebook's parent company) each saw their stock prices slide by approximately 5% as investors moved towards safer assets.

'An Agent of Chaos and Confusion'

Economists have long warned that Trump's trade policies could have far-reaching consequences for economic growth beyond 2026. His haphazard approach to tariffs has raised concerns over his understanding of their long-term impact on businesses and consumers.

'What is becoming ever clearer in the long run is that Trump is hurting US trend growth, that is, growth in the years beyond 2026. And he stands for higher prices for US consumers, which means, in my view, the Federal Reserve has no reason to cut rates with Trump as president and Trump sowing chaos and confusion,' Holger Schmieding, chief economist at Berenberg Bank, told CNBC earlier this week.

However, Schmieding stopped short of predicting a full-blown recession, arguing that the US economy remains relatively resilient despite Trump's actions.

'US consumers have money to spend, and they probably will. The labour market remains reasonably firm, and with energy prices easing, plus possible tax cuts and deregulation, I don't think there's an imminent recession risk,' he added.

A Global Trade Crisis in the Making?

The market turmoil triggered by Trump's tariff policies highlights deepening uncertainty over US trade relations. As the S&P 500 sheds trillions in value, investors are growing increasingly wary of the long-term damage these policies could inflict on economic growth, supply chains, and corporate earnings.

Moreover, global trading partners are likely to respond with countermeasures, potentially leading to retaliatory tariffs, economic slowdowns, and strained diplomatic ties.

This deterioration in confidence could push international investors towards more stable markets, further exacerbating volatility in US equities. If sustained, this climate of uncertainty risks not only stalling economic expansion but also weakening the US's position as a dominant global trade player.

For now, all eyes remain on Trump and whether his 'America First' approach will bolster the economy—or push it further into financial turmoil.