U.S. markets took a sharp turn on Monday as President Donald Trump’s renewed tariff threats and economic uncertainty sparked a widespread selloff. The Nasdaq suffered its steepest loss since 2022, while the U.S. dollar slumped against major peers amid growing concerns over a potential recession, now dubbed by traders as a looming “Trumpcession.”
Equities in Freefall: Tech Sector Leads the Decline
- The Nasdaq Composite plunged 4%, or 728 points, in its worst single-day performance since September 2022.
- The S&P 500 dropped 2.7%, while the Dow Jones Industrial Average fell 2.1%, shedding 890 points.
- The heavily watched Magnificent Seven tech giants lost a combined $760 billion in market value, with Tesla plunging 15%, erasing nearly $130 billion on its own.
- Since the beginning of 2025, these top-tier tech firms have lost approximately $1.6 trillion, amid concerns over trade war escalation, inflation risks, and global growth slowdowns.
Currency Markets: Dollar Retreats, Euro and Sterling Climb
- The U.S. Dollar Index (DXY) slumped 3.4% last week, its worst performance since November 2022.
- Investors, frustrated by erratic trade policies and uncertain monetary paths, rotated out of the dollar and into rival currencies like the euro and sterling.
- The EUR/USD pair surged to a 17-week high at 1.0900, gaining 4.85% over the past month, reversing a year-to-date loss.
- The dollar’s slide comes as traders grow wary of Trump’s shifting tariff stance, with sudden impositions and withdrawals leaving markets unstable.
Tariffs and Recession Fears: A “Trumpcession” in the Making?
- President Trump has enacted 25% tariffs on Mexico and Canada, only to partially suspend them days later, and is expected to roll out additional levies against the European Union in early April.
- Trump’s own remarks — “There will be a little disturbance, but we’re okay with that” — did little to reassure investors.
- Analysts are now openly discussing a potential “Trumpcession,” where escalating trade tensions and punitive tariffs trigger a domestic downturn, despite recent progress made by the Federal Reserve in managing inflation without stalling growth.
Outlook: Fragile Sentiment and Volatility Ahead
Markets remain on edge as investors digest the repercussions of erratic trade policy, an overstretched equity sector, and geopolitical uncertainty. With tech valuations under scrutiny and the dollar facing renewed downside, risk sentiment is increasingly fragile.
Unless the administration adopts a more consistent approach to trade and fiscal matters, further volatility — and potential capital flight into safer assets — should be expected. The narrative for Q2 2025 may be increasingly defined by how the market navigates a politically charged, policy-heavy environment with little visibility and growing macro risk.
