The stock market continues its sharp downturn, with the S&P 500 officially in correction territory and the Nasdaq 100 just 7% away from a bear market. Over the last 16 trading days, the market has erased an average of $340 billion per day, marking one of the fastest market value declines in recent history.
Trump 1.0 vs. Trump 2.0: A Stark Contrast
Market sentiment has shifted dramatically since Trump’s return to office. At this point in his first term (2017), the S&P 500 was up 5%. Today, under Trump 2.0, the S&P 500 is down 8%, a deeper drawdown than anything seen during his first year in office.
This stark contrast suggests a different economic approach from Trump this time around, with more aggressive trade threats and a willingness to tolerate near-term economic weakness.
Inflation Cools, But Markets Ignore It
February’s inflation data showed cooling price pressures, with both CPI and PPI falling more than expected:
Core CPI (YoY): 3.1% vs. 3.2% expected
CPI (YoY): 2.8% vs. 2.9% expected
PPI (YoY): 3.2% vs. 3.3% expected
This should have been bullish for stocks, as lower inflation increases the chances of the Federal Reserve cutting interest rates. However, any rallies were quickly sold off as Trump threatened 200% tariffs on the European Union, further escalating global trade tensions.
Timeline of the Crash
The market peaked on February 19th, despite trade war fears intensifying in early February. However, the real turning point was March 6th, when Trump stated that he was “not watching the stock market.The S&P 500 has not recorded back-to-back gains in 15 consecutive trading days, the longest streak since April 2024.This marks the fifth-longest such losing streak since the pandemic crash of 2020.Market uncertainty is at its highest since 2020.
Magnificent 7 Stocks Enter Bear Market
The biggest names in tech have been the hardest hit, with almost all of the Magnificent 7 now in bear market territory:
1. Tesla ($TSLA): -50%
2. Nvidia ($NVDA): -25%
3. Alphabet ($GOOGL): -22%
4. Amazon ($AMZN): -20%
5. Meta ($META): -20%
6. Microsoft ($MSFT): -19%
7. Apple ($AAPL): -19%
Tesla has been the worst performer, losing half its value in a matter of weeks.
Hedge Funds Rush for the Exit
Hedge funds have responded by selling global stocks at their fastest pace in four years, particularly on March 7th and 10th. Not even the 2022 bear market saw such a sharp reduction in exposure.The S&P 500 has now dropped 10% from its all-time high in less than three weeks, marking the fastest such correction since the 2020 pandemic crash.
Trump’s Strategy: A Controlled Slowdown?
It’s becoming increasingly clear that Trump is welcoming near-term economic weakness. His escalating tariff threats and lack of concern over market declines suggest a shift toward long-term economic nationalism, rather than short-term stock market gains.With volatility at its highest since 2020, the key question remains:
Is this just a correction, or the beginning of a deeper bear market?
Disclaimer: The information provided in this article is for informational and educational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks, and past performance is not indicative of future results. Readers are advised to conduct their own research or consult with a professional financial advisor before making any investment decisions. The author and Sensexnifty.com are not responsible for any financial losses incurred based on the information presented in this article.
