The U.S. stock market was down on October 10, 2025, primarily due to renewed investor concerns over President Donald Trump's aggressive tariff policies, particularly a new 100% tariff on branded and patented pharmaceuticals, which triggered broad selloffs in both domestic and global markets. This policy announcement intensified fears of inflation, supply chain disruptions, and retaliatory trade measures, undermining investor confidence.
Tariff-Induced Market Volatility
The latest market decline follows a pattern of trade-related instability that began earlier in 2025, when President Trump introduced sweeping tariffs under the International Emergency Economic Powers Act, declaring the U.S. trade deficit a national emergency. On October 10, the focus was on the pharmaceutical sector, where stocks like Sun Pharma, Biocon, and Zydus Lifesciences dropped sharply—by as much as 5%—after the 100% tariff announcement. These measures are seen as part of a broader protectionist agenda aimed at reshoring manufacturing but have repeatedly triggered market corrections due to their economic uncertainty.
Global and Sectoral Impact
Global markets mirrored the U.S. downturn, with the MSCI Asia Pacific Index and MSCI Emerging Markets Index falling 1% and 1.4%, respectively, reflecting widespread concern over trade fragmentation. In the U.S., tech stocks also contributed to the decline, with Amazon and Microsoft among the major decliners, compounding losses after weak economic data signaled sluggish growth and persistent inflation. The bond market showed signs of stress as well, with yields rising due to inflation fears and declining confidence in U.S. fiscal stability—a phenomenon described as "bond vigilantism".
Investor Sentiment and Capital Flows
Foreign institutional investors (FIIs) continued their selloff, withdrawing capital amid rupee weakness and unfavorable global cues. Investors increasingly shifted assets into safe-haven instruments like gold, the Swiss franc, and German government bonds, indicating a loss of confidence in U.S. financial stability. Despite strong corporate earnings from companies like Nvidia, broader macroeconomic headwinds dominated market
