The United States stock market has lost $5 trillion in value over the past three weeks. The rapid 10% decline from a record high has wiped out trillions of dollars in market value. The S&P 500 had a market value of $52.06 trillion at its peak on February 19.
As of Thursday, the index’s market value had decreased to $46.78 trillion, resulting in a total loss of approximately $5.28 trillion in just three weeks. The decline has come amid escalating trade tensions with several of the United States’ major trading partners.
Headlines about tariffs have been driving market movements.
US market sees significant decline
Signs of slowing economic growth have also surfaced, with weak consumer sentiment surveys and tepid outlooks from companies.
Barclays strategist Emmanuel Cau said to clients, “Our interactions with clients indicate that the mood music is changing. While many see recession talk as premature, concerns about erratic policy from the new administration abound, with the ‘uncertainty tax‘ hitting growth expectations.
Another factor contributing to the decline appears to be the unwinding of the growth trade related to artificial intelligence. Since February 19, Nvidia has been down 17%, and the Roundhill Magnificent Seven ETF has fallen 16%.
The run-up in those AI-related stocks before the correction had sparked concerns about the market being too richly valued. Even now, the S&P 500 is trading at 24.1 times its trailing 12-month earnings, according to FactSet. This is well above its long-term average.
Photo by; teleterapia.fi on Unsplash
