Indian markets fall in early trade as US stocks tumble towards their worst day in years

The Indian stock market saw a sharp decline during the opening session on Tuesday (March 11), mirroring the strong sell-off in the US stock market on Monday (March 10).

The Sensex lost 417 points while the Nifty was down by 130 points. Only five stocks in the Nifty 50 list opened with gains, while the other 45 stocks faced selling pressure.

Stock market analysts are of the view that US President Donald Trump’s disruptive tariff policy has negatively impacted the markets during the first 50 days of his second term.

‘Trump Uncertainty Discount’

Ajay Bagga, a banking and stock market expert, told ANI, “US markets sold off strongly in reaction to the Trump Uncertainty Discount that is pervading global supply chains, economies, geopolitics, and trade. The Atlanta Fed GDP Now forecast is showing a degrowth of -2.4 per cent for US GDP in the first quarter of 2025.”

Also read: Trump delays some tariffs on Mexico and Canada amid fears over trade war

“The question facing markets is – how has sentiment turned so much that from all-time-high US markets and US economic exceptionalism, the sentiment has turned sourly risk-off? The answer lies in the chaos and uncertainty unleashed by the Trump administration in its first 50 days. There is no option but to hunker down and wait out the next two months and hope for some clarity to emerge,” added Bagga.

US stock market sell-off

The US stock market's sell-off got even worse on Monday (March 10), and it was on track for its worst day in years as Wall Street questions how much pain President Donald Trump will let the economy endure in order to get what he wants.

The S&P 500 was down 3.2 per cent in afternoon trading, which would be its sharpest drop since the highest inflation in generations was shredding budgets in 2022. The Dow Jones Industrial Average was down 1,042 points, or 2.4 per cent, with just over an hour remaining in trading, and the Nasdaq composite was 4.6 per cent lower.

Also read: China on Trump's tariffs: 'If US wants war, ready to fight till the end'

The main measure of the US stock market is on track for a seventh swing of more than 1 per cent, up or down, in the last eight days following a scary stretch dominated by Trump's on-and-off-again tariffs. The worry is that the whipsaw moves will either hurt the economy directly or create enough uncertainty to drive US companies and consumers into an economy-freezing paralysis. The S&P 500 is down 9.1 per cent from its all-time high set on February 19.

US economy may be shrinking

The economy has already given some signals of weakening, mostly through surveys showing increased pessimism. And a widely-followed collection of real-time indicators compiled by the Federal Reserve Bank of Atlanta suggests the US economy may already be shrinking.

Asked over the weekend whether he was expecting a recession in 2025, Trump told Fox News Channel: “I hate to predict things like that. There is a period of transition because what we're doing is very big. We're bringing wealth back to America. That's a big thing.” He then added, “It takes a little time. It takes a little time.”

Also read: Trump’s tariffs on India: Trade war or negotiation tactic?

Trump says he wants to bring manufacturing jobs back to the United States, among other reasons he's given for tariffs. His Treasury secretary, Scott Bessent, has also said the economy may go through a “detox” period as it weans off an addiction to spending by the government.

The US job market is still showing stable hiring at the moment, to be sure, and the economy ended last year running at a solid rate. But economists are marking down their forecasts for how the economy will perform this year.

‘Everything taking backseat to tariffs’

At Goldman Sachs, for example, David Mericle cut his estimate for US economic growth to 1.7 per cent from 2.2 per cent for the end of 2025 over the year before, largely because tariffs look like they'll be bigger than he was previously forecasting.

He sees a one-in-five chance of a recession over the next year, raising it only slightly because “the White House has the option to pull back policy changes” if the risks to the economy “begin to look more serious.”

"There are always multiple forces at work in the market, but right now, almost all of them are taking a back seat to tariffs,” according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.

Big Tech stocks hurt the most

The worries hitting Wall Street have so far been hurting some of its biggest stars the most. Big Tech stocks and companies that rode the artificial-intelligence frenzy in recent years have slumped sharply.

Nvidia fell another 5.9 per cent on Monday to bring its loss for the year so far to 21 per cent. It's a steep drop-off from its nearly 820 per cent surge over 2023 and 2024.

Also read: China, Canada retaliate with counter-taxes as US tariffs go into effect

Elon Musk's Tesla fell 15.1 per cent to deepen its loss for 2025 to nearly 45 per cent. After getting an initial post-election bump on hopes that Musk's close relationship with Trump would help the electric-vehicle company, the stock has since slumped on worries that its brand has become intertwined with Musk. Protests against the US government's efforts to cull its workforce and other moves have targeted Tesla dealerships, for example.

Stocks of companies that depend on US households feeling good enough about their finances to spend also tumbled sharply. United Airlines lost 8.4 per cent, and cruise-ship operator Carnival fell 9.2 per cent.

Not just stocks

It's not just stocks struggling. Investors are sending prices lower for all kinds of investments whose momentum had earlier seemed nearly impossible to stop at times, such as bitcoin. The cryptocurrency's value has dropped below $78,000 from more than $106,000 in December.

Instead, investors have been bidding up US Treasury bonds as they look for things whose prices can hold up better when the economy is under pressure. That has sent prices for Treasurys sharply higher, which in turn has sent down their yields.

The yield on the 10-year Treasury tumbled again to 4.21 per cent from 4.32 per cent late Friday. It's been dropping since January, when it was approaching 4.80 per cent, as worries about the economy have grown. That's a major move for the bond market.

Also read: Warren Buffet calls Trump's steep tariffs on Canada, Mexico as 'an act of war'

All the uncertainty, though, hasn't shut down dealmaking on Wall Street. Redfin's stock jumped 64.7 per cent after Rocket said it would buy the digital real estate brokerage in an all-stock deal valuing it at $1.75 billion. Rocket's stock sank 17.2 per cent.

ServiceNow fell 7.9 per cent after the AI platform company said it was buying AI-assistant maker Moveworks for $2.85 billion in cash and stock.

European markets fall

In stock markets abroad, European indexes largely fell following a mixed session in Asia.

Indexes fell 1.8 per cent in Hong Kong and 0.2 per cent in Shanghai after China said consumer prices fell in February for the first time in 13 months. It's the latest signal of weakness for the world's second-largest economy, as persistent weak demand was compounded by the early timing of the Lunar New Year holiday.

(With agency inputs)