US markets have plunged into a significant correction, with the tech-heavy Nasdaq 100 now down 12% from its February peak and trading at its most oversold level since 2022. Monday’s selloff was particularly brutal, representing the Nasdaq’s worst drop since October 2022, while the S&P 500 fell 2.7% and closed below its critical 200-day moving average for the first time since November 2023. This market downturn reflects deep concerns about President Trump’s economic policies, particularly regarding trade and government employment.
The once-dominant “US exceptionalism” investment thesis is crumbling as American equities have dropped 4.5% year-to-date while international markets in China and Europe outperform. Major banks are responding decisively, with Citigroup and HSBC both downgrading US stocks to neutral. Citigroup specifically warns that US economic data will likely “undershoot the rest of the world” in coming months. Meanwhile, market expectations for Federal Reserve intervention have doubled in just a month, with traders now anticipating about 80 basis points of interest rate cuts by the end of 2025 as growth concerns intensify.