US Stock Market Crashes / US economy suffers losses for the first time in 3 years, stock market crashes

The US economy shrunk by 0.3% in the first quarter of 2025, causing a stir in Wall Street. The Dow, S&P and Nasdaq recorded huge declines. Questions have been raised on Trump's tariff policy, while shares of Starbucks, Tesla and Meta saw a decline.

US Stock Market Crashes: The decline in the US economy in the first quarter of 2025 not only shook the market, but also raised questions about President Donald Trump's tariff policies. On Wednesday, Wall Street's major stock indices registered a sharp decline, further strengthening the fear that the US is heading towards a possible recession.

Quarterly data confirms decline

The US GDP declined by 0.3% between January and March 2025, which is the first time in the last three years. In contrast, the economy showed a growth rate of 2.4% in the October-December 2024 quarter. Experts believe that the heavy duties imposed by the Trump administration have destabilized the business environment. Companies imported in a hurry to avoid possible duties, causing economic imbalance.

Earthquake in the stock market

The Dow Jones Industrial Average fell by 1.6% within 15 minutes of the market opening. The S&P 500 fell 2% to close at 5,449.09, while the Nasdaq Composite Index fell 2.6% to 17,005.71. Tech and consumer companies' stocks saw the biggest decline.

Starbucks shares slid 7.9% as the company's quarterly profit fell 50% to $384.2 million. At the same time, Tesla shares fell 6%, Amazon shares fell 4%, and Meta shares fell more than 3%. On the other hand, Mondelez gained 3.3% due to stable revenue and positive full-year forecasts.

Gold and silver also sluggish

Assets considered safe like gold and silver also showed weakness on Wednesday. The main reason for this was the strength of the US dollar and signs of a possible reconciliation in the US-China trade dispute. Spot gold fell 1.1% to $3,279.51 an ounce, while US gold futures fell 1.3% to $3,289 an ounce. Silver prices fell 2.2% to $32.24 an ounce.

What's next?

Analysts believe that this trend of economic slowdown in the US is not short-lived. The markets may see further turmoil due to a decline in consumer spending and uncertainty in trade. Investors are confused about President Trump's tariff policies, and if stability is not achieved soon, the US may face a severe recession.