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Until 20 days ago, the US stock market was at a record high. The economy looked strong. There was no indication of recession. But now there is talk of recession everywhere. The reason is that the US stock market (Dow Jones, Nasdaq, S&P 500) has recorded a major decline.
Dow Jones fell 2.08% on Monday and 1.06% on Tuesday. Nasdaq decreased by 4% on March 10 and 0.51% on March 11. Similarly, S&P 500 lost 2.7% on Monday and 0.73% on Tuesday.
On Monday, Nasdaq saw the worst day since September 2022, declining 4%. Dow Jones, which fell nearly 900 points, closed down from its 200-day moving average for the first time since 1 November 2023.
In an interview by Fox News, US President Donald Trump said that the economy was going through ‘changes’. According to Monday’s closing, 366 components of S&P 500, which are around 73%, were trading 10% or more than their 52 -week high.
These are 6 big signs regarding recession
- Fear of increasing interest rates: The US Federal Reserve has indicated that they will soon increase interest rates to bring inflation under control. This led to fear among investors and started selling huge amounts of shares.
- Tariff War: Donald Trump warned that the tariff war from Canada, Mexico and China could have a ‘slight trouble’ to Americans. This statement created an atmosphere of fear in Dow Jones.
- Changes in index: CNN’s Fear and Greek index showed the level of ‘excessive fear’ on Monday, which was ‘neutral’ until a few weeks ago.
- Big fall in tech: Tech companies have a large weightage in the US stock market. Tesla’s stock dropped up to 13%, while Nvidia, Apple and Alphabet below 5%. Microsoft and Amazon shares declined by 2–4%.
- Companies insolvency: In the first two months of 2025, 129 companies went bankrupt. This largest number in the beginning of the year since 2010.
- Fear of recession: Goldman Sachs increased the possibility of recession from 15% to 20%. However, the bank believes that if Trump sees the situation worsening, then you can make changes in their policies.
Sensex-Nifty compensated the loss The Sensex on Tuesday compensated most of its damage and almost stabilized. The Sensex closed at 74,102.32 with a slight decline of 12.85 points. However, private sector IndusInd Bank shares fell 27% to close at Rs 655.95.
The bank reported some discrepancies in its derivative portfolio. During the day it fell 28% to a low-lying level of 52-week of Rs 649. Experts said, “Trump’s tariff policy has started to affect the stock markets.
