The market crash on October 10, 2025, happened primarily due to escalating trade tensions between the U.S. and China. President Trump announced plans for a "massive increase" in tariffs on Chinese imports, including a sudden 100% tariff effective November 1, 2025, in response to China's export controls on rare earth minerals and other measures. This announcement rattled investors and ended months of calm in the markets, triggering sharp sell-offs, especially in technology stocks. The Dow Jones Industrial Average dropped 1.05%, the S&P 500 fell 0.8%, and the Nasdaq Composite slid nearly 2% on that day. Additional factors contributing to the market drop included weak corporate earnings that disappointed investors, rising bond yields making fixed-income investments more attractive than stocks, and broader geopolitical risks and uncertainties. The combination of trade tensions, concerns about AI sector overvaluation, rising bond yields, and global economic uncertainty created a "perfect storm" that led to a sharp decline in stock prices across sectors. The market experienced its largest single-day drop since April, with nearly $1.65 trillion wiped out in value on that trading day alone.
