Stock Market Meltdowns as Tariffs Rise with Uncertainty

Adrianna McKinney '26

During February and March, the American stock market declined as tariffs were raised. Donald Trump’s on-and-off economic policy led to a large market selloff at the end of last month. In addition to this, Wall Street both opened and ended in red.

The Dow, for example, lost a total of 1,100 points at one point. Other examples include, S&P 500 plunging 2.7% and Nasdaq falling 4%. Which made this the worst day of the year for S&P 500 and the biggest single-day decline for Nasdaq since 2022.

Tesla declined 15.4% earlier this year in February. Even earlier in November of 2024, Tesla’s stocks rose at an incredible rate. However, since then Tesla’s stocks declined at a total of 45%.

There were some warning signs that the stock market was going to decline sooner rather than later. For one, the Federal Reserve Bank of Atlanta is expecting the U.S. economy to contract during its first quarter, which was the fastest since 2009, excluding COVID-19.

Another sign was the overall money supply in the U.S. declining. However, the most telling sign is the valuation tool, which shows a traditional price/earnings ratio. The valuation tool foreshadowed the decline, with S&P 500 having a slightly lowered ratio from 38.84 to 35.34.

The so-called on-and-off economic policy from Donald Trump raised taxes on imports. He only threatened a massive tariff, which is said to be set on April 2nd on imports from Canada and Mexico. The tariff he threatened was to impose out 250% on all Canadian dairy products and another high tariff on their lumber. Some other tariff increases involve doubling the tariff on Chinese imports to 20%. Starting only earlier this month on March 12th, there was a tariff of 25% on all steel and aluminum imports.

Though the last tariff is only a threat and possibly a bluff, some state that it’s just as harmful as really imposing it. According to David Bahnsen, chief investment officer in Bahnsen Group, “The talk of tariffs, in a lot of ways, is worse than the implementation of them.” Bahnsen further states that by threatening a tariff, you install fear into the people.

Besides the stock market plunging and tariffs rising, there are other things to worry about, suc as job employment slowing down and inflation picking up.