Since Donald Trump’s return to the White House, the Nasdaq has dipped 12.44%. The S&P 500 fell 7.23%, and Bitcoin dropped 21%. Increasing inflation and uncertainty about Trump’s trade policies have unnerved investors, sending the Nasdaq into a tailspin.
Nasdaq Experiences a Harsh Plunge: What’s Driving the Drop?
The Nasdaq Composite has experienced the steepest decline among the major indices, declining 12.44% since Trump took office in January. The Nasdaq closed at 12,799.29 on March 31, down from 19,756.78 on January 21 — a day after Trump’s inauguration. Although other major indices such as the S&P 500 and Dow Jones declined, the Nasdaq, which is heavily weighted in tech, has been most susceptible to inflation concerns and Trump’s unpredictable trade policies.
Investors at first received Trump’s return warmly with hopes of a pro-business, low-tax setup. However, increased inflation, supply chain disturbance, and trepidation around a trade war soon took a backseat to such expectations. The tech world, particularly the businesses in semiconductors, e-commerce, and software, has hit its worst with valuations significantly declining. Trump’s trade orientation and tariff scares are also worrisome to investors, increasing pressure on the market further.
Analysts explain that Trump policies might be fueling the aggravation of challenges tech firms had been experiencing through supply chain concerns, increased costs of raw materials, and squeezing labor markets. The mix of increased production prices and political insecurity has driven the downturn.
Cryptocurrency Market Bleeds Due to Volatility
Cryptocurrencies, the shining star of Trump’s business-friendly policy, have also not escaped. Bitcoin hit a record high of $106,000 after Trump’s comeback but has since fallen 21.2% to around $83,400. Ethereum has fallen 43.28%, from $3,269.74 to $1,854.51 during the same timeframe.
The crypto crash is part of a broader pattern of market flux. With rising fear of inflation and uncertain trade policy, investors are withdrawing from volatile assets such as stocks and cryptocurrencies. Instead, they are transferring to secure assets such as government bonds, thereby infusing even more volatility in global markets. Experts point out that together, increasing inflation and trade uncertainty might prolong the decline in the market, making even conventional stocks and digital currencies susceptible.
