Global Markets Plunge: Trump Tariffs, Crypto Reserve Disappointment Drive Losses

Wall Street's screens flashed red Monday as U.S. stock indexes stumbled, bitcoin (BTC) tumbled to $77,393, and the crypto market shed billions to hover at $2.57 trillion.

U.S. equities wiped over $1.75 trillion from Wall Street on Monday amid a triple threat of policy uncertainty, investor outflows, and external shocks that triggered steep declines in both cryptocurrency and the U.S. stock market.

The Dow Jones Industrial Average slid 2.3%, the S&P 500 dropped 3.1%, and the Nasdaq Composite tumbled 4.3%, notching its worst day since December 2022.

The S&P 500 also slid into negative year-to-date territory, extending a four-day losing streak as the broad measure of U.S. stocks faced selling pressure.

Optimism dampened after President Donald Trump announced plans for tariffs on Canadian, Mexican, and Chinese imports this year, raising fears of a global trade war and economic slowdown.

The president’s refusal to rule out a recession also weighed on Wall Street, where tech stocks bore the brunt of the selloff. The S&P tech sector fell 4.2%, with shares of Tesla Inc tumbling 14%.

The multi-pronged market decline highlights interconnected risks from global policy shifts, investor sentiment, and cybersecurity threats, with both traditional and crypto markets reacting to a volatile geopolitical landscape.

Here’s a closer look at five key drivers behind Monday’s fiery market meltdown:

1. Economic Policy Uncertainty

President Donald Trump's tariff announcements on Canadian, Mexican, and Chinese imports this year have fueled fears of a global trade war and economic slowdown.

The president's refusal to rule out a recession during a Monday interview with CNBC further dampened market optimism.

"I don't want to say that there could be a recession. I don't think there will be a recession. We're doing very well economically," Trump said.

But asked if he could rule out a recession, Trump replied: "I wouldn't say that."

The Dow fell 2.3%, the S&P 500 dropped 3.1%, and the Nasdaq Composite tumbled 4.3%, notching its worst day since December 2022. The S&P 500 also slid into negative year-to-date territory.

2. Disappointment With U.S. Crypto Strategic Reserve

The March 6 executive order establishing the U.S. Crypto Strategic Reserve excluded immediate bitcoin purchases, leading to a 4% drop in BTC price and $650.80 million in crypto liquidations within the first 24 hours.

The Crypto Fear & Greed Index reached 20 today, signaling extreme investor pessimism.

3. Crypto Investment Outflows

Crypto investment products saw $876 million in outflows for the week ending March 7, bringing the four-week total to $4.75 billion.

Assets under management fell to $142 billion as investors pulled out of riskier assets amid a broad risk-off shift. Bitcoin alone saw outflows of $756 million.

4. Bybit Hack Fallout

The Feb. 21, 2025, hack of Bybit, which lost $1.46 billion to North Korean-linked actors, continues to destabilize crypto markets.

The breach eroded trust in exchanges, leading to sell-offs and rendering the crypto market vulnerable to further declines.

5. Market Volatility and Fear

Trump's policies and his latest recession remarks contributed to heightened market volatility.

Tesla shares plummeted 14%, while the S&P tech sector fell 4.2%. The S&P 500 slid into negative year-to-date territory, extending a four-day losing streak.

The market reacted negatively to Trump's threat of tariffs on Canadian and Mexican goods, rolling over from Friday's rally.

The presidential interview also saw a pessimistic outlook on the U.S. economy. When asked if he could rule out a recession, Trump said he wouldn't.

The president's pessimistic tone and the threat of tariffs contributed to a selloff in U.S. equities. The Dow fell 2.3%, the S&P 500 dropped 3.1%, and the Nasdaq Composite tumbled 4.3%, notching its worst day since December 2022. The S&P 500 also slid into negative year-to-date territory.

Optimism dampened after President Donald Trump announced plans for tariffs on Canadian, Mexican, and Chinese imports this year, which sparked fears of a global trade war and economic slowdown.

The president's refusal to rule out a recession also weighed on Wall Street, where tech stocks bore the brunt of the selloff. The S&P tech sector fell 4.2%, with shares of Tesla Inc plummeting 14%.

The multi-pronged market decline highlights