The American stock market has experienced an unprecedented decline of $11 trillion since February 19, 2025. A remarkable dip also took place on April 4. Many of these losses stem from growing concerns regarding the new tariff policies under President Trump administration. The market recorded a jaw-dropping $3.25 trillion loss in a single day, more than the cryptocurrency market’s total valuation of $2.68 trillion at that time. With rising fears of recession, stocks have become stagnant.
Trump’s Tariff Policies Initiate Speculation of Economic Recession
Along with the worry of new Trump policies, the president announced changes to the current tariffs worldwide on April 2. The tariffs include a 10% baseline on all imported goods and will have additional reciprocating tariffs to zero in on other countries. Overall, the policy has unlock significant alarm from economists due to the tariffs now surpassing 25% for the first time since the 1900s. This is similar to the Smoot-Hawley Tariff Act that some economists argue exacerbated the Great Depression.
Kobeissi Letter, a financial insights platform, highlighted the plunge in the market on April 4 as a critical warning indicator with, “U.S. stocks have now erased a massive $11 trillion since February 19,” noting that the probability of recession has surpassed 60%.”
Trump’s economic policy had sought to bolster U.S. manufacturing, but it has made a lot of investors anxious.
“If these tariffs remain, recession is impossible to avoid,” the Kobeissi Letter warned of the tariffs and their potential long term repercussions on global trade relations.
The Resulting Impact on Major Tech Companies
The consequences of the tariffs have undoubtedly hit the large tech companies the hardest. With respect to the “Magnificent 7” tech stocks, Tesla’s shares plummeted by 10.42%, Nvidia’s had a decline of 7.36%, and Apple also faced a notable decrease of 7.29%. These stocks, as reported by TradingView, have had a significant negative impact on the market downturn.
Having shed 6% of its value, the Nasdaq 100 index entered bear market territory after being in an extended sell-off phase. This marks a turning point in what is becoming one of the unprecedented sell-offs since March 2020. Its whipsawing selloff is concerning since it targets growth stocks that traditionally supported market expansion.
Bitcoin Holds Strong Despite Stock Market Decline
During the recent downturn in the stock market, Bitcoin remains astonishingly stable. Currently, Bitcoin (BTC) is trading at $83,749, suffering a meager weekly loss of 0.16%, as per CoinMarketCap. This trend has led some traders to consider Bitcoin’s potential use in diversifying risk in the wake of traditional market uncertainties.
“Bitcoin doesn’t appear to care one bit about tariff wars and markets tanking,” remarked technical analyst Urkel. Even the most pessimistic observers of Bitcoin seem to have softened their stance. Stock market commentator Dividend Hero expressed, “I’ve hated on Bitcoin in the past, but seeing it hold steady while stocks collapse is very interesting to me.”
Have Tariffs Become a Trump Policy to Control Interest Rates?
The current challenges in the market have raised questions regarding Trump’s economic plan. Bitcoin commentator Anthony Pompliano believes market chaos is being engineered to invite pressure from the Federal Reserve to relax interest rates. According to Pompliano, the conspiracy lies in crashing asset prices to force the Fed into reducing borrowing costs, orchestrated by Trump and Treasury Secretary Scott Bessent.
While former President Trump has requested a decrease in interest rates multiple times, the Federal Reserve has pushed back on those requests, keeping the rates in a band of 4.25% to 4.5%. Pompliano suggests that with increasing debt obligations for the US, putting rates on lower could ease refinancing difficulties.
“Pompliano’s quote goes here,” he claimed that could serve as a calculated move aimed to gain political advantage by worsening market conditions.
Is a recession unavoidable?
While the economic stage continues to transform, the chance of a recession is now becoming more probable. The constant decline of the stock market, in addition to uncertainties related to Trump’s proposed tariffs, has added fuel to the apprehensions surrounding the US economy. There’s widespread consensus among economists that the US economy is likely to head towards contraction if these trajectories persist.
The Kobeissi letter claiming a 60% probability of recession seems to gain steam alongside a wave of financial analysts agreeing that the ongoing conditions in the market simply cannot be sustained. Not the latter months may be quite defining in turning these fears into a reality based on the trajectory the market is headed toward.
Conclusion: Will The Market Recover or Continue to Decline?
To summarize, the United States suffers a staggering $11 trillion in losses since February due to concerns regarding President Trump’s tariffs, and U.S. stocks do not appear to be recovering anytime soon. Meanwhile, Bitcoin has demonstrated some resilience; however, instability in the traditional markets is quite evident. So the question remains, what is the outlook for the economy? Are we on a road to recovery, or are we looking at a prolonged recession?
As for forecasts, the outlook for the stock market remains highly contingent on how the tariff discussions proceed and if the Federal Reserve yields to Trump’s overtures for reduced interest rates. Given the risks of recession, both investors and policymakers will have to keep a keen eye on evolving developments.
FAQs
Q1: What is causing the decline in the value of U.S. stocks?
A1: The decline in the value of U.S. stocks stems from the concerns regarding the President Trump’s new tariff policies which have invoked fears of an economic downturn and possible recession.
Q2: How has Bitcoin performed amid the stock market losses?
A2: Bitcoin’s relative strength amid equities’ decline has been notable, as it has demonstrated resilience during the recent downturn in traditional markets.
Q3: What are the assumptions made regarding the trade tariffs implemented by President Trump?
A3: Political commentators like Anthony Pompliano highlight that President Trump, in part, seems to be deliberately creating havoc within the markets with the goal of pushing the central banking system into lowering interest rates.
Glossary of Key Terms
Tariffs – A system of taxation on internationally traded products aimed at safeguarding local companies.
Bear Market – An extended period where there is a prolonged drop in the price of securities due to widespread pessimism.
Recession – A period of negative economic growth that occurs when Gross Domestic Product (GDP) declines over two consecutive quarters.
Bitcoin (BTC) – A globally traded currency based entirely on information technology and software with no official issuer and is widely held as a store of value.
References
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