Stock Market Updates: Sensex Nifty Fall Explained — 5 Major Reasons Behind Market Crash

Stock markets from the US to India are in total chaos. On Monday, the Dow Jones tanked over 820 points (1.6%), and the S&P 500 and Nasdaq also fell more than 1%. Today, on Tuesday, our Sensex also crashed by over 700 points.  

Image Credit : ChatGPT

So, why did the US stock market fall?

A report from an AI company called Anthropic raised big questions about IBM's key business model. This got investors worried that AI tech could seriously hit the earnings of traditional tech companies.

Image Credit : Gemini

Why the US stock market fell:

1. An AI company, Anthropic, released a report that questioned a key business model of IBM. This scared investors, who now think AI could hurt the income of old-school tech companies.
2. Software stocks, already under pressure since the start of the month, continued their sell-off. Microsoft's share dropped 3%, while CrowdStrike plunged by almost 10%. This weakness in tech stocks directly pulled down the Nasdaq and S&P 500.
3. A report from Citrini Research warned that the AI boom could put pressure on the US economy, pushing the unemployment rate up to 10%. This also affected companies linked to consumer spending.
4. US President Donald Trump took a hard stance on tariffs. He warned that countries 'playing games' with the US will face higher duties. The European Union also expressed concern over this policy and paused the process for a trade agreement with the US, increasing global trade tensions.
5. After the stock market's weakness, investors moved towards safer assets. Gold prices in the spot market crossed $5,200 per ounce, while silver was near $90. The US Dollar Index stayed below 98. Meanwhile, the sell-off in Bitcoin continued, and its price fell below $64,000.

Image Credit : Gemini

Indian stock market crashes

The Indian stock market is also feeling the heat from the US market's weakness. On Tuesday, February 23, at 9:30 AM, the Sensex was at 82,556.99, down by 737.66 points. The Nifty was trading at 25,504.05, showing a drop of 208.95 points. Investors are clearly nervous due to pressure in the IT sector and weak global cues.

Image Credit : Getty

Pressure on Indian IT stocks

Indian IT stocks also saw a major sell-off. The Nifty IT index tumbled by 3.18%. Coforge Ltd and Persistent Systems Ltd fell by 4.05% and 3.73% respectively. Even big names like HCL Technologies, Infosys, and Tech Mahindra were down by about 3%.

Image Credit : Gemini

Some stocks show slight gains

Despite the massive market crash, some companies like Tata Steel, SBI, Asian Paints, and Axis Bank managed to post small gains. Overall, the weakness in the IT sector and pressure from the US market led to a large-scale sell-off in the Indian market.

Image Credit : Gemini

Global Impact and Investor Concerns

The US market's weakness, uncertainty over tariffs, and AI-related fears have made investors cautious. Indian investors are now moving towards safer assets like gold and bonds. Market ups and downs are common, so there are still opportunities for long-term investors.

Disclaimer: This article is for informational purposes only. Any information about shares, stocks, crypto, or investments is not investment advice. Stock market investments are subject to market risks. Always consult your financial advisor or a market expert before making any investment.