The U.S. stock market has lost trillions of dollars in value over the past three weeks.
#MarketAlert | US: S&P 500 snaps 4-week losing streak, Dow Jones up 0.1%, Nasdaq up 0.5%#UnitedStates #DowJones #Nasdaq pic.twitter.com/t7G8TmAMZp
— ET NOW (@ETNOWlive) March 22, 2025
The market value of the S&P 500 has dropped from $52.06 trillion at its peak on February 19 to $46.78 trillion on Thursday. This marks a total loss of about $5.28 trillion.
The decline has been driven by several factors. These include escalating tensions with major U.S. trading partners, with tariffs often impacting market moves. Signs of slowing economic growth, weak consumer sentiment surveys, and tepid corporate outlooks have also contributed.
New 52-week lows among S&P 500 members didn’t aggressively spike in recent correction … not quite as close to fall 2023 and nowhere near prior bear markets pic.twitter.com/SZQyxvdW4l
— Liz Ann Sonders (@LizAnnSonders) March 24, 2025
Barclays strategist Emmanuel Cau noted that clients are becoming more concerned.
From the @WSJ article, “Investors Who Were All In on U.S. Stocks Are Starting to Look Elsewhere.”#markets #economy #stocks #investing #investors pic.twitter.com/Ay6x10oWM2
— Mohamed A. El-Erian (@elerianm) March 23, 2025
tariff impact on stock market
He said, “While many see recession talk as premature, concerns about erratic policy from the new administration abound, with the ‘uncertainty tax’ hitting growth expectations.”
The unwind of the growth trade related to artificial intelligence has also played a role in the decline.
AI-related stocks like Nvidia and the Roundhill Magnificent Seven ETF have seen steep drops since February 19. The rapid growth in these stocks before the correction had raised concerns about overvaluation. Despite the recent decline, the S&P 500 is still trading at a relatively high valuation.
It is currently at 24.1 times its trailing 12-month earnings, well above its long-term average. The market downturn has wiped out a significant amount of wealth in a short period. It highlights the risks and volatility that can come with investing in stocks, even in a bull market.
Investors will be closely watching economic indicators and corporate earnings in the coming weeks to gauge the market’s future direction.