U.S. Stock Market Plummets 6% as Tariff Fears Trigger $3.25 Trillion Loss
2min read The United States stock market experienced a significant downturn on April 4, with a one-day loss of $3.25 trillion. This loss surpassed the entire cryptocurrency market's valuation of $2.68 trillion at the time, highlighting the severity of the market decline. The Nasdaq 100, in particular, fell into a bear market after a 6% decline, marking the largest daily drop since March 16, 2020. This decline was driven by fears over the U.S. President's tariff announcements, which were seen as a historic move that could lead to a recession if continued.
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The Magnificent-7 stocks, which include some of the largest companies in the U.S., were among the hardest hit. tesla led the losses with a 10.42% drop, followed by nvidia at 7.36% and apple at 7.29%. The significant decline across the board signaled a broader market selloff, with the S&P 500 also experiencing a substantial loss of $2.4 trillion in market value. This was the largest single-day loss in value since the market's previous major decline, driven by a combination of economic data releases and geopolitical tensions.
The crypto market, however, showed resilience amidst the stock market turmoil. Despite a brief dip to $2.58 trillion, the total crypto market cap recovered to $2.61 trillion, representing a modest 0.54% increase from its opening figure. This stability in the crypto market contrasted sharply with the significant losses experienced by traditional equities. The total crypto market cap shrank by 5.3% to $2.7 trillion, with daily liquidations exceeding $500 million. This decline was attributed to the overall market sentiment, which was weighed down by anxiety ahead of a speech by the Fed Chair and the anticipation of a rate cut.
The market's fear gauge, the CMC Crypto Fear and Greed Index, reflected the prevailing sentiment, currently standing at 25, indicating a state of "fear." This was a rebound from the yearly low of 15 recorded earlier, which implied a state of "extreme fear." Bitcoin, the largest cryptocurrency by market cap, shed 1.3% overnight to trade at $82,049. Ethereum, the second-largest cryptocurrency, also slipped 1.5% in the past 24 hours to trade at $1,771. Other major cryptocurrencies, such as XRP, BNB, and Solana, experienced similar declines, while Dogecoin and tron showed modest gains.
The overall market capitalization of cryptocurrencies stood at $2.62 trillion, representing an overnight decline of 1.2%. This decline was attributed to the broader market sentiment, which was influenced by the economic data releases and geopolitical tensions. The market's resilience in the face of the stock market turmoil was a testament to its growing maturity and stability. The crypto industry has pointed out that while the stock market continues to decline, Bitcoin remains stronger than most expected. Crypto trader Plan Markus pointed out that while the entire stock market “is tanking,” Bitcoin is holding. Even some crypto skeptics have pointed out the contrast between Bitcoin's performance and the U.S. stock market during the recent period of macro uncertainty. Stock market commentator Dividend Hero told his followers that he has "hated on Bitcoin in the past, but seeing it not tank while the stock market does is very interesting to me." Meanwhile, technical trader Urkel said Bitcoin "doesn't appear to care one bit about tariff wars and markets tanking."
