Tariff Crash Among the Largest Downturns in 21st Century

As markets across Asia and Europe went from bad to worse on Monday, Wall Street is bracing for another day of selloffs after President Trump showed no signs of backpedaling in the wake of last week's tariff-induced market turmoil. After European stocks clawed back from steeper losses through the trading day on Monday, the S&P 500 opened at 4,954 points, down 2.4 percent from Friday's close and 12.6 percent from Wednesday's close, the last before Trump's "Liberation Day" announcements. Depending on how the day unfolds, the index could clock the worst three-day loss since the financial crisis, when the S&P 500 plummeted 14 percent over three trading days in October 2008.

Considering the carnage we’ve seen over the last few weeks and since Trump's "Liberation Day" tariff announcement in particular, it’s hard to imagine that the U.S. stock market was at an all-time just six weeks ago. Since February 19, when the S&P 500 closed at 6,144 points, the index has now dropped almost 20 percent, bringing it on the verge of bear market territory, which is commonly defined as a 20-percent drop from an index's latest high.

As the following chart shows, the drop we’ve seen over the past six weeks is already among the larger market downturns of the 21st century, but it’s not yet as deep as the worst crises of the past 25 years. Considering how quickly investors turned sour and how far-reaching the consequences of Trump's latest tariff hikes are, the past three days could just be the beginning of a longer market depression though, as fears of a global recession are already mounting.

While markets are reeling from the tariff panic, President Trump showed no signs of doubt over whether his protectionist push was the right move. The tariffs already in place are "a beautiful thing to behold," he wrote in a Truth Social post late on Sunday. "The United States has a chance to do something that should have been done decades ago," he added Monday morning, saying that "greatness" would be the eventual result.