Stock Market Crashing

The stock market crash of 2025 hit hard and fast, starting on April 2 when President Trump announced sweeping tariffs on imports from China, Canada, and Mexico. Dubbed "Liberation Day," the move sparked panic selling, with the Dow dropping over 4,000 points in just two days, its worst two-day loss since 2020. The crash was triggered by a mix of aggressive trade policies, stubborn inflation, and mounting government debt. The IMF slashed its global growth forecast for 2025 to 2.8%, down from 3.3%, citing the significant negative impact of tariffs imposed by U.S. President Donald Trump. The IMF identified heightened trade tensions and policy uncertainty as major drivers of economic slowdowns across all major economies, reducing U.S. growth projections to 1.8%. The organization also raised the probability of a U.S. recession to nearly 40% and warned of growing financial stability risks. Meanwhile, hedge funds leveraged bets on U.S. bonds backfired as yields spiked, and rattled banks and investors. The Federal Reserve's independence also came under fire. President Trump criticized Chair Jerome Powell over interest rate policies, prompting Senator Elizabeth Warren to warn that firing Powell could trigger a severe market crash.  The Trump administration paused some tariffs, leading to a brief market rally. However, the damage was done. Companies like Klarna, Chime, and StubHub halted IPO plans, and pension funds took a hit. Analysts warn that the market remains volatile, with risks of further downturns if inflation persists or trade tensions escalate.​ The 2025 crash serves as a reminder of how quickly markets can turn, especially when fueled by geopolitical tensions, policy uncertainty, and economic instability. For investors, it's a lesson in the importance of  staying informed about global events that can impact the financial landscape.

Image Courtesy of Daniel Foster on Flickr.