In just two days, more than $6 trillion in market value vanished from U.S. stock markets, more than 1.5X India's GDP. The tech-heavy Nasdaq Composite index has officially entered bear market territory, falling more than 20% from its peak, led by sell-off in Big Tech companies like Nvidia, Tesla, Apple and others.
For many investors, this crash felt sudden and shocking but beneath the surface, the warning signs were there. So, what happened and why? Let's unpack the Wall Street bloodbath, from the crash to valuations, and what it could mean for the economy and you.
Why did the US market crash?
The Nasdaq fell from 20,204 to 17,398 in just 32 trading sessions, a staggering 14% decline in just over a month. That drop officially pushed the index into bear market territory (defined as a decline of 20% or more from recent highs). And it’s not just the Nasdaq. The Dow Jones and S&P 500 also saw sharp pullbacks. The CBOE Volatility Index (VIX), which measures market fear, surged to 45.3, the highest level since April 2020 when COVID first roiled markets.
In total, the U.S. market has lost over $6 trillion in value in just two days. To put it simply, this was one of the fastest and largest market wipeouts since the dot-com crash.
What triggered the US market meltdown?
The biggest catalyst behind this sudden meltdown is tariffs. US President Donald Trump announced a massive hike in tariffs last week, raising import taxes on key goods, especially from China, Vietnam, Canada and several other nations. Some duties jumped to as high as 58%, marking the highest tariff levels in over 100 years. Here's a look at how tariffs impact companies.
| Risk Factor | Impact |
| Higher costs | Companies relying on imports (especially tech and retail) now face increased input costs. |
| Supply chain disruptions | Many industries, especially chips, electronics, and auto, rely on Chinese components. Tariffs throw those into disarray. |
| Slower Growth | Tariffs hurt trade and demand. That adds to recession fears already building in the U.S. economy. |
| Inflation vs. growth dilemma | Higher import costs = higher prices = more inflation. At the same time, weaker demand = slower growth. This puts the Federal Reserve in a tight spot. |
Learn more about Trump Tariffs and how it caused the US market to crash by clicking Here
Nasdaq enters bear market: What it means
A bear market is a drop of 20% or more from a recent high. The Nasdaq’s fall from 20,204 to 17,398 over just 32 sessions now ranks as one of the fastest bear phases since 2000. But the real question is — are stocks actually cheap now? Let’s look at Nasdaq’s valuation:
| Metric | Peak | Now | Long term Average |
| P/E Ratio | 38x | 30x | 25x |
Source: Nasdaq, CNBC
Even after a steep correction, the Nasdaq still trades at 30 times earnings, above its 20-year average. That means while valuations have come down, they’re still not screaming bargains, especially if earnings get hit in a recession.
Big Tech meltdown: Who got hit and why it matters
When markets tumble, Big Tech stocks like Apple, Google, Microsoft etc. are usually front and center, not just because these companies dominate the Nasdaq, but because they play such a central role in the global economy. In this crash, some were hit harder than others, depending on how exposed they are to tariffs, China, global supply chains, and ad-dependent business models.
Apple’s dependence on Chinese manufacturing leaves it exposed to cost shocks or demand drops. Tesla’s exposure runs deep, with its Shanghai Gigafactory and reliance on Chinese components like batteries and chips. Amazon’s squeeze is twofold: higher retail prices from imports and a slowdown in Chinese ad spend hitting its profit engine.
| Company | Tariff Exposure | Key Risks |
| Apple | High (products assembled in China) | - Margin hit (2–3%) if tariffs stay elevated - Price hikes may reduce demand |
| Microsoft | Low (mainly software/cloud) | - Economic slowdown → reduced IT/cloud spend - Possible guidance downgrade |
| Amazon | High (retail imports + ad biz) | - Higher product prices may hurt sales - Chinese ad pullback impacts ad revenue |
| Alphabet (Google) | Low (ads/cloud, not hardware) | - Indirect impact via global ad cuts - EPS estimate cut by 2% |
| Meta | Medium-High (ad-dependent) | - Ad spend cuts globally - Ongoing losses from metaverse investments |
| Tesla | Very High (China key for prod. + demand) | - Tariff risk on parts and batteries - Factory in Shanghai could be impacted |
| Nvidia | High (chip manufacturing + exports) | - Tariffs on Chinese fabs and components - Export controls to China could hit revenue |
Even the relatively insulated players aren’t immune. Microsoft’s slowdown risk stems from potential cuts in enterprise and cloud spending as businesses tighten budgets. Alphabet’s ad pullback is already showing in trimmed revenue forecasts. And Meta’s gamble on the metaverse becomes even riskier when advertising slows and investor patience wears thin.
Let’s take a closer look at the most valuable tech companies, and what their valuations look like after the correction
| Stock | M-Cap Drop (5D) | P/E Now | 3Y Median | Drop from Median | Relative to Industry |
| Nvidia | ↓11.9% | 31.7 | 59.2 | ↓46.5% | Way above (22.9) |
| Apple | ↓11.6% | 29.6 | 28 | ↑6% | Above (17) |
| Amazon | ↓11.1% | 30.6 | 54.4 | ↓44% | Above (15.9) |
| Alphabet | ↓11.1% | 17.8 | 23.1 | ↓23% | Near fair (17.1) |
| Tesla | ↓9..1% | 108 | 64.3 | ↑68% | Way above (11.8) |
| Microsoft | ↓5.1% | 28.8 | 33 | ↓13% | Above (21.2) |
Source: Google Finance, Alpha Spread
Déjà Vu? Echoes of 1987’s Black Monday
After the 2-day carnage on Wall Street last week, Market experts are drawing comparisons to the infamous Black Monday crash of 1987. Jim Cramer, longtime market expert and CNBC host, thinks the 2025 crash could rival, or even be worse than, the famous 1987 market meltdown.
“If the president doesn’t try to reach out and reward these countries and companies that play by the rules, then the 1987 scenario... the one where we went down three days and then down 22% on Monday, has the most cogency,” Cramer said.
| Metric | Black Monday 1987 | April 2025 Crash |
| Dow One-Day Fall | -22.6% | -5.5% |
| S&P 500 Drop | -20.4% | -5.97% |
| Market Cap Loss | ~$500 billion | ~$5 trillion |
| Trigger | Rising interest rates, trade deficit | Tariff hikes, recession fears |
| Tech’s Role | Early program trading | High-frequency, algorithmic trading |
Source: CNBC, Google Finance
For context, in both cases, markets were overvalued, policy changes were abrupt, and investor psychology turned on a dime. In both 1987 and 2025, the stock market had been climbing to record highs before suddenly crashing. In early 2025, the Nasdaq, S&P 500, and Dow Jones all hit new peaks, just like they did before the 1987 crash.
Back in 1987, the crash was triggered by rising interest rates and a growing trade deficit. This time, in 2025, the sharp fall was caused by President Trump’s sudden tariff hike which raised fears of a global trade war. Just like in 1987, fear spread fast among investors. But now, with advanced automated trading systems, market drops can happen even quicker than they did in the ’80s.
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