- The Nasdaq 100 dropped 6%, marking its largest fall since March 2020, pushing U.S. stocks into bear market territory.
- The U.S. stock market has erased over $11 trillion in value since February 19, 2025.
- Retail investors bought $4.7 billion in stocks after the crash, marking the highest net buying in 10 years, while hedge funds sold stocks at the highest rate since 2010.
On April 4, 2025, the U.S. stock market took a massive hit, losing over $11 trillion in value, which is worth more than the entire crypto market. The Nasdaq 100 dropped 6% in a single day, its biggest fall since March 2020.
This sharp decline pushed the U.S. stock market into what’s known as a “bear market,” where prices fall 20% or more from recent highs. Experts now say there’s a more than 60% chance the U.S. could be heading into a recession.
Trump’s Historic Tariffs Fuel Crypto Market Turmoil
The sell-off began the day before, on April 2, after President Donald Trump announced a new round of “reciprocal tariffs,” which has pushed the overall U.S. tariff rate above 25%—higher than it’s been since the early 1900s.
If these tariffs stick around, many economists believe a recession is almost certain. Consequently, China responded quickly, hitting back with 34% tariffs on U.S. products. On top of that, Federal Reserve Chair Jerome Powell said he’s “not in a hurry” to cut interest rates, offering little comfort to already-shaken markets.
By the end of April 2, market analysts were already warning of a deeper drop and suggested shorting (betting against) the S&P 500. Since then, the index has fallen by 600 points.
Interestingly, everyday investors — known as retail traders — jumped into the dip and bought $4.7 billion worth of stocks on Thursday, the biggest buying spree by retail in 10 years. At the same time, hedge funds (large investment firms) were busy selling off stocks at the highest pace since 2010.
Major stock indexes like the Nasdaq 100, Russell 2000, Nikkei 225, and the Magnificent 7 have all entered bear market territory. The Magnificent 7 are now down 29% from their peak, marking their lowest level since last August.
The S&P 500 also dropped more than 10% in just two days, something that’s only happened 7 times in history. The last time we saw drops like this was during the financial crises of 2020, 2008, and 1997.
On the flip side, while stocks were crashing, Bitcoin and other crypto tokens held up surprisingly well. Bitcoin actually rose by nearly 1% that day.