Top multinational companies faced a significant decline in market values in the first quarter of 2025 due to tariffs imposed by U.S. President Donald Trump, raising concerns about a possible U.S. recession. Data from LSEG revealed that the top 10 global firms experienced a 13.2% reduction in their combined market value, amounting to $18.64 trillion by the end of Q1 2025, marking the largest drop since June 2022.

The continuous growth in tech stocks, which had been driving equity index increases, slowed down as worries regarding excessive AI investments, inflated valuations, and uncertain profitability led to market apprehension.

Tesla Inc saw a drastic 35.7% decline in market value to $833.59 billion, while Broadcom Inc and NVIDIA Corp also witnessed substantial drops of 27.56% and 19.59% in market capitalization to $787.25 billion and $2.64 trillion, respectively.

The Nasdaq Composite index, which had surged by approximately 84.5% over the past two years, decreased by 10.42%, marking its most significant drop since June 2022.

During the first quarter, President Trump imposed tariffs on aluminum, steel, autos, and raised tariffs on all products from China. He announced plans to introduce reciprocal tariffs that would apply to all countries, causing investor anxiety.

Goldman Sachs revised its EPS growth forecasts for S&P 500 companies to 3% for this year, down from the earlier estimate of 7%, attributing this adjustment to increased tariffs, slower economic expansion, and rising inflation. The organization stated that decelerating growth and heightened uncertainty justify a higher equity risk premium and reduced valuation multiples for stocks.