Sharp Losses Across U.S. Equities After February Peak
The U.S. stock market has borne the brunt of global equity losses since mid-February, when valuations peaked across major indices. The S&P 500, which represents 87% of the total U.S. equity market, has shed $9.06 trillion in market capitalization since February 19, falling from a record high of $52.05 trillion to $42.99 trillion by April 4. This represents a 17.4% decline in value, aligning with the index’s corresponding price drop over the same period.
More striking is the market’s accelerated decline over just two trading sessions following the announcement of new tariffs by U.S. President Donald Trump. Between Wednesday night and Friday’s close, the S&P 500 lost $5.06 trillion—a 10.5% plunge in just 48 hours.
Beyond the S&P 500, the broader U.S. stock market has also suffered. All common stock across large, mid, and small cap firms in the U.S. dropped from $59.73 trillion in market cap on February 19 to $48.91 trillion on April 4. That $10.82 trillion decline equates to an 18.1% fall—an even sharper drawdown than the S&P 500, reflecting heavier losses in smaller firms outside the top 500.
“The U.S. led the way up in the global rally—and is now leading the way down.”
Global Markets Down—But Less Severely
The worldwide equity selloff has also erased trillions in value, though not as severely as in the U.S. Global stock markets peaked at a total capitalization of $93.84 trillion the week of February 19. By April 4, that figure had fallen to $80.96 trillion—a loss of $12.88 trillion, or 13.7% overall.
However, removing the U.S. from this calculation reveals a notably softer impact abroad. Global stock market capitalization excluding the United States declined just 6% over the same period, from $34.1 trillion to $32.05 trillion—a $2.06 trillion loss. Compared to the 18.1% drop in the U.S. market, international equities have demonstrated far greater relative stability.
This divergence is largely attributable to stronger recent performance in European and Asian markets, which had less exposure to the tariff-related shockwaves triggered by U.S. trade policy. It also reflects different macroeconomic conditions and monetary policy responses across countries.
S&P 500’s Outsized Role Amplifies National Impact
The S&P 500 alone accounts for nearly 9 out of every 10 dollars in the U.S. stock market, amplifying its influence on broader national financial health. When large-cap equities decline, the ripple effect hits institutional portfolios, index funds, pension reserves, and retirement accounts across the board. The S&P 500’s two-day $5.06 trillion drop, in particular, highlights how policy shifts can rapidly reshape market expectations and trigger vast wealth destruction.
The February 19 market peak was already priced for optimism—low interest rates, strong corporate earnings, and an assumption of trade stability. Once that equation changed with tariff announcements, the speed of the correction reflected a near-instantaneous repricing of risk. Import-heavy industries, tech giants with global supply chains, and retailers dependent on international goods were among the first sectors to contract in value.
The tariff announcements appeared to act as a catalyst, breaking investor momentum and triggering algorithmic selloffs. Yet the breadth of the pullback suggests deeper fragilities that may have been bubbling beneath the surface. The U.S. market’s overrepresentation in global benchmarks has become a double-edged sword—an engine of gains during bull runs and a drag when sentiment turns.
For context, the $9.06 trillion drop in the S&P 500’s value is more than five times the annual GDP of Germany. When equity prices move at this scale, the implications extend well beyond portfolios and into consumer sentiment, corporate investment planning, and political discourse.
International Markets Show Relative Resilience
While the U.S. reels, many international markets have fared better. With a combined capitalization drop of just 6%, non-U.S. equities have weathered the recent turbulence with significantly less damage. Part of this is mathematical: U.S. stocks had simply risen more during the global bull run, so they had further to fall. But regional factors also played a role.
European markets benefited from steadying monetary policy from the ECB and a slightly more muted response to inflation. Asian markets, particularly in Japan and South Korea, continued to attract capital thanks to favorable exchange rates and domestic policy reforms. Emerging markets, while still volatile, did not experience the same degree of capital flight seen in prior crises—a sign of increasing maturity in their equity structures.
Currency dynamics have also played a role. A stronger dollar during periods of global uncertainty often boosts U.S. stocks by attracting foreign capital. But when the source of the volatility is American policy itself, that advantage disappears. In such cases, investors often rotate into other markets with better perceived stability or alternative growth stories.
Importantly, while the U.S. market continues to dominate in size, its disproportionate exposure to specific risks—from technology to trade—makes it more vulnerable during episodes of policy-induced shock. This cycle, unlike many before, has flipped the usual narrative: international markets providing ballast while U.S. indexes sink.
The U.S. equity market, which once led the global rally with historic gains, now finds itself at the center of a rapid and substantial downturn. With $10.82 trillion erased from the U.S. market since mid-February, and $9.06 trillion of that from the S&P 500 alone, the scale is staggering. Tariff-related policy changes have added fuel to the correction, triggering a two-day $5 trillion collapse that shocked even seasoned investors.
Meanwhile, international markets have shown relative restraint, dropping just 6% in total value outside the U.S. This disparity underscores a shift in global capital dynamics and questions the once unquestioned resilience of American equities.
As markets continue to recalibrate, the key question isn’t just how deep the losses will go, but whether the U.S. will continue to act as the epicenter of risk—or if the rest of the world will eventually follow. Either way, the message is clear: no market, no matter how dominant, is immune to the consequences of economic policy.
