It’s a rout across Wall Street. The key indices slumped. The Dow Jones fell almost 900 points while the tech-heavy Nasdaq plunged 4% to a 6-month low. This was the biggest single day fall for the Index in 2025.
Here are three reasons why US markets are falling:
Trump’s tariff policy spark recession worries
US President Donald Trump’s tariff Policy and the retaliatory tariffs imposed by several countries in response sparked recession concerns. The Trump administration raised its import tax on Chinese goods to 20% from 10%. In retaliation, China has levied an import tariff of 15% on American goods, majorly agricultural products coming from Canada. This will likely raise inflation, further prompting the US Fed to increase key lending rates. The markets declined after President Donald Trump ducked questions about whether the US economy was facing a recession or price rises as a result of tariff moves. “I hate to predict things like that. There is a period of transition, because what we’re doing is very big,” said Donald Trump when Fox News asked him about looming recession.
ALSO READUS stocks fall after Trump declined to rule out a recession Fear of economic slowdown
Fears about a recession are weighing heavily on investors in the US. The US markets plunged on Monday due to rising concern about the cost of the trade war that America will face. In a report, analysts at JPMorgan Chase warned that the possibility of a U.S. slowdown had resulted in a “materially higher risk of a global recession this year because of extreme U.S. policies.” They put the probability of a downturn at 40 percent.
US 10-year Treasury yield slides
U.S. Treasury yields dropped as fears of an economic slowdown grew. The benchmark US 10-year Treasury yield fell 9 basis points to 4.226%. The 2-year Treasury yield dropped nearly 10 basis points to 3.906%.
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