2025 stock market crash

Starting on April 2, 2025, global stock markets crashed amid increased volatility following the introduction of new tariff policies by United States President Donald Trump during his second term. On April 2, which he called "Liberation Day", Trump announced sweeping tariffs impacting nearly all sectors of the US economy. The announcement triggered widespread panic selling across global stock markets, including those in the United States. It became the largest global market decline since the 2020 stock market crash, which occurred during the recession caused by the COVID-19 pandemic.

Trump entered his second term with a particularly strong domestic stock market. This momentum continued for several weeks after his inauguration. However, the administration soon began implementing increasingly aggressive trade policies aimed at advancing protectionism and applying economic pressure. These included escalating the ongoing trade war with China, starting a trade war with Canada and Mexico, imposing heavy tariffs, and heightening tensions with key allies. As these policies took effect, financial markets grew increasingly turbulent and volatile, with a growing sense of uncertainty.

As stock prices declined, investors initially moved into bonds, pushing down yields. The Trump administration pointed to the yield drop as evidence that its tariff measures were helping reduce borrowing costs. However, this trend quickly reversed as bond markets began to experience widespread selling as well, described as an example of bond vigilantism. The spike in bond yields, attributed to waning investor confidence in US fiscal policy, led to emergency responses by several governments.

The Trump administration announced it would pause tariff increases on April 9, 2025, leading to a stock market rally with major US indices posting their largest gains in years. Following further walk backs and initial trade deals, the S&P 500 US stock market index turned positive for the year on May 13, 2025.