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U.S. Markets Approach Correction as Tariffs and Economic Uncertainty Weigh on Stocks

The S&P 500 has dropped over 9% from its peak, with volatility surging and fears of a recession rising due to President Trump's tariff policies.

A security personnel stands inside the New York Stock Exchange (NYSE) building on Tuesday following Monday’s broad sell off in New York City, U.S., March 11, 2025. REUTERS/Shannon Stapleton
Markets are closing in on a correction as President Trump's trade war rhetoric continues.
President Donald Trump’s on-again, off-again tariff threats have deeply rattled markets.
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Overview

  • The S&P 500 has fallen more than 9% from its February peak, nearing the 10% threshold for a market correction, with the Dow Jones and other indices also declining significantly.
  • President Trump's tariff increases, including a recent doubling of tariffs on Canadian steel and aluminum, have heightened economic uncertainty and disrupted market confidence.
  • Volatility indicators such as the VIX have surged, with the index up over 80% since Trump's second term began, signaling heightened market fear and instability.
  • Technical analysts warn of concerning signals, including the S&P 500 closing below its 200-day moving average for the first time since 2023, a potential indicator of prolonged market weakness.
  • Economists and analysts point to rising recession risks, with some advising diversification into safer assets, while others suggest potential buying opportunities in undervalued equities.