US Market Crashed On Recession Fear; Dow Jones Fall 2%; S&P 500, Nasdaq At Six-Month Low

US market crashed on Monday, March 10 due to panic frenzy after President Donald Trump did not rule out recession risk owing to his tariffs implementation on foreign countries. Dow Jones dropped by 2%, while S&P 500 and tech-heavy index Nasdaq reached their lowest levels since September last year. Also, the performance comes ahead of key inflation and PPI data which will further provide clarity on upcoming Fed rate cuts.

Dow Jones: The Dow Jones Industrial Average or DJIA traded at 42,027.12, down by 774.60 points or 1.8%, while it was near its intraday low of 41,979.81.

Nasdaq Composite: The tech-heavy index plunged by 759.40 points or 4.2% to trade at 17,440.86, which was closer towards its intraday low of 17,418.30. Nasdaq has touched a six-month low.

S&P 500: The Standard and Poor's 500 index traded at 5,612.94, down by 157.26 points or 2.7%. Also, hitting a six-month low, the S&P 500 index touched an intraday low of 5,609.25.

Why the US Market Crashed On March 10?

As per Trading Economics, the S&P 500 and Nasdaq hit their lowest levels since September 18th, with the S&P 500 now down 8% from its record high. In a Fox News interview, President Trump declined to rule out a recession following his administration's tariff policy changes, describing the current economic phase as a "period of transition".

Trading Economics further said Fed Chair Powell acknowledged rising economic uncertainty last week, while jobs data signalled a cooling labour market. This week, traders will closely monitor key inflation data, with CPI and PPI reports due later. Communication services, tech and consumer discretionary were the worst-performing sectors while energy outperformed. Also, megacap stocks traded sharply lower with Tesla tumbling around 5.7% after data showed a 49% plunge in China shipments in February.

However, the Charles Schwab report believes that the Consumer Price Index (CPI) and Producer Price Index (PPI) on Wednesday and Thursday could help set the tone, though economic growth concerns seem to have replaced inflation as the prime concern.

Things To Watch Out:

Tech results

Tech companies such as Oracle (ORCL), Broadcom (AVGO), Marvell (MRVL), and AMarvell (MRVL) will be in focus due to their earnings.

Charles Schwab's report said, tech companies are being punished even when they beat earnings estimates and issue robust outlooks, apparently because many investors want to see even stronger guidance.

European Stocks:

Michelle Gibley, director of international research at the Schwab Center for Financial Research noted that as U.S. stocks and the dollar pull back, signs of new life flash in Europe-perhaps a hint of investors rotating into overseas assets. The index of seven European aerospace and defence stocks is up over 30% this year, while the U.S. Magnificent Seven are down 10%. It's not just defence names: European banks are at a 17-year high and European funds attracted $12 billion in inflows the four weeks through March 5, the most in a decade.

Dollar:

With the US market in a free fall, the dollar index continued on its six-consecutive decline, slipping to 103.6 which is at a four-month low. Concerns over the US economic outlook weighed on the dollar.

The dollar tumbled about 3.5% last week, marking its worst weekly performance since November 2022. The dollar weakened broadly, but its sharpest declines were against the Japanese yen and Swiss franc, as heightened risk aversion drove demand for safe-haven currencies, as per Trading Economics.