Investor concerns over US President Donald Trump’s tariff policies have led to a significant stock market sell-off, erasing $4 trillion from the S&P 500’s value since its peak last month.

Wall Street, once optimistic about Trump’s economic agenda, has reacted sharply to growing uncertainties.

New trade policies targeting major partners such as Canada, Mexico, and China have contributed to market volatility. “We’ve seen clearly a big sentiment shift,” said Ayako Yoshioka, senior investment strategist at Wealth Enhancement. “A lot of what has worked is not working now.”

On Monday, the market downturn intensified, with the S&P 500 falling 2.7 percent, marking its steepest decline this year. The Nasdaq Composite plummeted 4 percent, its worst one-day drop since September 2022.

The S&P 500 has now fallen 8.6 percent from its February 19 record high, approaching the 10 percent threshold that signals a market correction. Meanwhile, the Nasdaq has dropped more than 10 percent from its December peak.

Trump declined to comment on the possibility of a recession amid investor anxiety over trade disputes. “The amount of uncertainty that has been created by the tariff wars with regard to Canada, Mexico, and Europe is causing boards and C-suites to reconsider the pathway forward,” said Peter Orszag, CEO of Lazard, at the CERAWeek conference in Houston.