Five Unusual Features of 2025’s Stock Market Plunge

The current stock market decline stands out from previous downturns in several key ways.

– Stable Earnings Forecasts: Wall Street earnings estimates have barely changed (down just 1.7% since early 2025) despite significant market drops, a pattern only previously seen during the 2020 COVID crash.

– Consecutive Opening Declines: S&P 500 futures have opened down more than 1% for four straight sessions—something that’s only occurred once before, after Lehman Brothers failed in 2008.

– Dollar Weakness: The U.S. dollar has weakened alongside stocks, breaking the post-2008 pattern where the dollar typically strengthens during market downturns.

– Passive Investment Impact: The rise of passive investing (now holding twice the assets of active funds) may be amplifying volatility through concentrated holdings and sophisticated hedge fund strategies.

– Policy-Driven Triggers: Unlike many previous selloffs caused by economic factors, this one stems directly from policy decisions—specifically Trump’s tariff announcements—described by one investment advisor as tossing “a grenade into the foxhole.”