Market Plunge: Trade Uncertainty, Recession Fears Grip Investors, Tech Stocks Hammered

THUNDER BAY – March 11, 2025 – North American markets experienced a sharp selloff on Monday as growing fears of a U.S. recession, fueled by uncertainty surrounding trade tariffs, rattled investor confidence. The tech sector took a particularly hard hit, with significant declines across major indices.

The S&P 500 saw its worst trading day of the year, while the Nasdaq suffered its largest drop since 2022. Investors, reacting to President Donald Trump’s fluctuating stance on tariffs, are increasingly concerned about the potential for these protectionist measures to stifle economic growth.

“A combination of trade war fears, geopolitical uncertainty, and weaker economic indicators could be the trigger for a significant market correction,” warned Dan Coatsworth, an investment analyst at AJ Bell in London.

The market downturn has led to a reevaluation of the “Trump put,” the belief that the administration would intervene to prevent sharp market declines. This assumption is now being questioned, with analysts suggesting the administration may be willing to tolerate a downturn to achieve broader economic goals.

The selloff was exacerbated by a surge in Japanese bond yields and a stronger yen, leading to the unwinding of yen carry trades, which particularly impacted tech stocks, including the “Magnificent 7” AI megacaps.

Market Highlights:

• S&P 500: Down 155.64 points (-2.70%) to 5,614.56
• Nasdaq Composite: Down 727.90 points (-4.00%) to 17,468.32
• Dow Jones Industrial Average: Down 890.01 points (-2.08%) to 41,911.71
• S&P/TSX Composite Index (Canada): Down 378.05 points (-1.53%) to 24,380.71
• Tesla: Plunged 15.4%, its worst single-day drop since September 2020.
• Bitcoin: Dropped 5.53% to $78,488.64.

The TSX also saw significant declines, driven by losses in base metals, tech, financials, and industrials. However, telecom and utilities stocks experienced gains as investors shifted towards defensive positions.

Outlook: Is a Bear Market Coming?

Despite the sharp drop, some analysts aren’t convinced that a full-fledged bear market—a 20% decline from recent highs—is imminent. “This was a very bad day, but it’s not time to panic just yet,” said Michael Currie, senior investment adviser at TD Wealth.

While bond yields dipped—with the U.S. 10-year Treasury yield falling 10 basis points to 4.219%—the decline wasn’t severe enough to signal a full-scale flight to safety. This suggests that while investors are spooked, not everyone is ready to abandon equities altogether.

Still, with the Federal Reserve Bank of Atlanta’s economic indicators hinting at a slowdown and Goldman Sachs downgrading its U.S. growth forecast to 1.7% for 2025, recession risks are back in the conversation. If trade tensions continue to escalate, markets may be in for a turbulent few months ahead.

“This was a very bad day, but it’s not time to panic just yet,” stated Michael Currie, senior investment adviser at TD Wealth.

However, if trade tensions continue to escalate, the coming months could see significant market volatility.