As JPMorgan raised the probability of a US recession from 30% to 40%, global financial markets were thrown into panic. The S&P 500, tech-heavy Nasdaq, and Dow Jones Industrial Average all experienced significant declines this week, and the cryptocurrency market was not spared. On March 10, cryptocurrencies and tech stocks faced massive sell-offs, with fears of an economic recession intensifying despite efforts by the White House to ease concerns.
JPMorgan analysts wrote in The Wall Street Journal, “We see a material risk that the US falls into recession this year owing to extreme policies.” Meanwhile, Goldman Sachs economists increased their 12-month recession probability from 15% to 20%, warning that this figure could rise further if the Trump administration remains committed to its policies despite worsening economic data. Morgan Stanley, on the other hand, lowered its economic growth forecasts and raised inflation expectations, predicting GDP growth of just 1.5% in 2025, dropping to 1.2% in 2026.
Despite US President Donald Trump’s chief economic advisor, Kevin Hassett, expressing optimism about the US economic outlook in a March 10 CNBC interview, he acknowledged volatility in the quarter’s economic data. Trump himself described the current economic situation as a “period of transition” in a Fox News interview. However, the market’s reaction was decidedly more pessimistic, with blockchain prediction platform Polymarket even quipping that recession probability charts are “the best-looking chart in finance right now.”
In the stock market, the so-called “Trump bump” has faded, with the S&P 500 now lower than its pre-election level in November last year. The Nasdaq has entered correction territory, falling 14% in just three weeks. On March 10, all three major US indices closed in the red: the S&P 500 dropped 2.7% to its lowest level since September, the Nasdaq plunged 4% in its worst single-day performance since 2022, and the Dow Jones Industrial Average fell nearly 900 points, or about 2.1%. The “Magnificent Seven” tech giants collectively lost over $750 billion in market value in a single day, with Tesla’s stock plummeting 15%, making it the worst-performing stock in the S&P 500 this year.
The cryptocurrency market also failed to escape the sell-off. On March 11, the total market value of cryptocurrencies fell 7.5% to $2.6 trillion, a sharp drop from its early November highs, with about $240 billion in funds withdrawing from the sector. Bitcoin prices also fell below key support levels, falling 4% on the day to a low of $76,784 before recovering slightly to around $79,000.
The market turmoil highlighted investors’ concerns about the economic outlook, and cryptocurrencies, as high-risk assets, were the first to be sold off. As the risk of economic recession increases, the cryptocurrency market may continue to be under pressure in the short term, and investors need to be cautious in dealing with market fluctuations.
