On Tuesday, US markets saw significant sell-offs, particularly in the technology sector, as investors expressed growing anxiety about President Donald Trump’s economic and trade strategies.

Market Overview: Key Indexes Decline

The S&P 500, a benchmark for blue-chip stocks, fell by 1.1% by mid-afternoon in New York, with all 11 sectors enduring losses. Notably, the consumer cyclicals sector led the decline, reflecting investor fears about economic stability during uncertain times.

Concurrently, the Nasdaq Composite saw a drop of 1.6%. This decline erased gains made during a rally the previous day. Tesla, led by Elon Musk, experienced a sharp decrease of 4.6%, marking a considerable drop of nearly 50% since its peak in December. Nvidia also faced a decline of 1.5% ahead of a keynote address by CEO Jensen Huang at a significant developer conference.

Investor Sentiment and Economic Concerns

The downturn in stock prices reflects deep-seated concerns among investors regarding Trump’s tariffs on major trading partners. These policies have started to show signs of slowing economic growth and increasing inflation. A recent survey from Bank of America highlighted that investors have made their largest reduction in US equity allocations to date in March.

Business Conditions and Economic Projections

A New York Federal Reserve survey released concurrently revealed that local business conditions were “considerably worse than normal,” citing declines in employment and the highest input price increases for industries in nearly two years.

In contrast, a separate Federal Reserve report indicated that US industrial production increased by 0.7% in February, significantly exceeding analysts’ expectations of a 0.2% rise. This data was viewed favorably by some analysts, such as Bradley Saunders from Capital Economics, who commented it could ease recession fears. However, Saunders cautioned that the full impact of Trump’s tariffs had yet to be felt, suggesting that there may be further challenges ahead for industrial sectors.

Technology Stocks Under Pressure

Tech stocks in particular have been among the hardest hit in the current market environment. An index tracking the so-called “Magnificent Seven”—including major players like Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla—has fallen 17% since the S&P 500 reached an all-time high on February 19.

Upcoming Federal Reserve Meeting

Traders are gearing up for the Federal Reserve’s upcoming meeting on Wednesday. While expectations are that the central bank will maintain current interest rates, any statements from Fed Chair Jay Powell regarding the overall health of the economy will be scrutinized closely by market participants.

Currency Movements

The US dollar experienced a minor decline of 0.1% against a basket of foreign currencies, and notably, it has relinquished all gains made since the presidential election in November.