Market Mayhem: Stocks Plunge Amid Trade War and Stagflation Fears
- Andrew Schneider
- Mar 18
- 2 min read
In the last three weeks of trading, the market has lost $5.28 trillion in value. Wall Street remains vigilant as indices, including the S&P 500, experience sharp and relentless declines. The broad index of U.S. stocks fell 1.4% on Thursday alone—marking a drop of over 10% since its all-time high in February.
This downturn is attributed to many factors, but the most prominent is the ongoing tariff war initiated by President Donald Trump. The administration’s new trade policies have cast a shadow over investor sentiment, intensifying concerns about economic stability.
Adding to the uncertainty, fears of stagflation are mounting. Stagflation is the rapid increase in the price of goods while economic growth remains stagnant. Trump and his Treasury Secretary, Scott Bessent, have emphasized that the administration is focused on long-term growth rather than short-term market fluctuations. “I’m not concerned about a little bit of volatility over three weeks,” Bessent stated in an interview on CNBC.
Historically, market corrections occur every 18 to 24 months, and only about one in five corrections lead to bear markets. Many economists remain optimistic despite the recent selloff. "The government appears to be following the 'eat your vegetables before you have dessert' approach," said Seema Shah, Chief Global Strategist at Principal Asset Management, in a note to clients on Thursday. "So far in 2025, the U.S. economy has only faced headwinds and has not yet benefited from any tailwinds."
However, signs of a broader economic slowdown are emerging. Consumer sentiment fell 11% in March, marking the third consecutive month of decline. With growing uncertainty about the economy's direction, more investors are moving to hard assets like gold. The price of an ounce topped $3,000 for the first time on Thursday.
As recent headlines from the new administration continue to surface, both Wall Street investors and everyday Americans remain uncertain on where the market and the broader economy are headed.
Sources:
https://www.reuters.com/markets/wealth/sp-500-correction-six-charts-2025-03-13/#:~:text=Stock%20market%20corrections%20are%20fairly,record%20highs%2C%20the%20data%20showed.
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