GLOBAL MARKET
Global Markets Today: S&P 500, Nasdaq Crash – Is a Bigger Correction Coming?
On March 13, 2025, major US stock indices, S&P 500 and Nasdaq, fell sharply, losing up to 2% amid growing fears of a trade war and a potential US government shutdown.
- S&P 500 closed 1.39% lower at 5,521.52.
- Nasdaq dropped 1.96%, ending at 17,303.01.
With these declines:
- S&P 500 has now fallen over 10% from its 52-week high of 6,147.43.
- Nasdaq has crashed over 14% from its peak of 20,204.58.
Why is the US Stock Market Falling?
The market is reacting to several concerns:
- Trade War Fears:
- President Donald Trump announced 200% tariffs on wine and alcoholic products from France and the EU.
- Countries like China and Canada have retaliated with their own tariffs.
- This has raised fears of higher inflation and slower economic growth.
- Inflation & Interest Rates:
- While US CPI data was better than expected earlier in the week, investors are now uncertain about future rate cuts.
- The Federal Reserve may delay rate cuts due to inflation concerns.
- Stretched Valuations & Recession Fears:
- The S&P 500’s P/E ratio is around 28, and the Buffett Indicator (Market Cap to GDP) is at 200%, both signaling overvaluation.
- Experts warn that higher inflation, slower growth, and rising interest rates could lead to a sharper correction.
What’s Next? Could There Be a Bigger Correction?
- Market volatility is expected to continue as investors assess trade tensions and economic data.
- Key levels to watch:
- If US unemployment rises beyond 4.5%, the Fed may cut rates sooner to support the economy.
- A softer 10-year bond yield could help stabilize equities.
- Mega-cap stocks are expensive, but some parts of the market still offer value.
Final Outlook:
2025 is shaping up to be a tough year for US markets, with risks of:
✔ Trade war escalation
✔ High inflation
✔ Tighter monetary policy
Investors should watch key economic indicators like inflation, growth, and jobs data for signs of market direction.
Source: Mint