New York, August 2, 2025 — More than $1.1 trillion in market value was wiped out from U.S. equities on Thursday, as investors reacted sharply to a combination of hawkish signals from the Federal Reserve, a surprise uptick in inflation data, and escalating global trade tensions.
The massive sell-off saw the S&P 500 tumble by over 3%, its worst single-day performance since March 2023, while the tech-heavy Nasdaq dropped more than 4.5%, led by heavy losses in mega-cap stocks such as Apple, Nvidia, Tesla, and Amazon. The Dow Jones Industrial Average fell more than 1,000 points intraday before closing down nearly 900 points.
Financial analysts cited multiple triggers: renewed speculation that the Fed could hike rates again later this year, poor earnings guidance from several major firms, and geopolitical jitters, including new tariffs and trade disputes impacting U.S. tech exports.
“The market’s valuation had been running ahead of fundamentals,” said Julia Tran, chief strategist at Argo Capital Partners. “Investors are now recalibrating based on a more stubborn inflation picture and reduced confidence in earnings growth.”
Technology and consumer discretionary sectors were the hardest hit, with Nvidia alone shedding nearly $150 billion in market cap. Financials also dipped amid concerns that higher rates would reduce lending activity.
The sudden downturn wiped out weeks of gains, and market watchers now anticipate heightened volatility in the coming weeks. While some investors view the dip as a correction rather than a full-blown crisis, others warn that continued uncertainty over rate policy and trade could trigger deeper declines.
Despite the losses, some analysts suggest opportunities for long-term buyers as valuations become more reasonable. But for now, Wall Street is on edge — and global markets are closely watching what comes next.
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