The US stock market experienced a staggering $1.1 trillion in losses on Friday August 1. This dip is majorly associated with rising inflation across the US and the widespread panic stemming from Donald Trump’s new wave of tariffs. According to reports, some US trading partners, including Canada, are now facing an increased tariff rate from the United States. 

Meanwhile, the crypto market is also feeling the heat as macroeconomic factors take a hit on the market. Bitcoin, Ethereum and other top altcoins are now in red amid the widespread market plunge. 

US Stock Market Losses $1.11 Trillion

A post by WatcherGuru (an all-things crypto & finance market updates platform) shows that the US stock market saw a massive wipeout of up to $1.11 trillion on Friday. Speculations have it that this significant wipeout is contributed by a series of factors which are in charge of the dampened macroeconomic scene. 

JUST IN: 🇺🇸 $1.11 trillion wiped out from US stock market today. pic.twitter.com/F82IKy2lxJ

— Watcher.Guru (@WatcherGuru) August 1, 2025

Notably, Nasdaq took the bigger hit recording a 2.2% plunge while the the S&P 500 dropped by 1.6%, followed by the Dow which dipped by 1.2%. These dips contributed to a multi-hundred-billion-dollar plunge across US equities. Subsequently, the US dollar also tanked marking the steepest one-day dip since April 10. Treasury yields also dropped significantly.  

Why Is the Stock Market Dipping?

One key reason for the losses in the US stock market is the soaring inflation. Yesterday (August 1), featured the release of the July jobs report which came in weaker than expected. The report issued by the Bureau of Labor Statistics showed that only 106,000 new positions were added over the last three months. In July alone, only 73,000 jobs were added, meaning an uptick in unemployment rates. 

“A weak jobs report. The US economy added only 73,000 jobs in July. That’s way below expectations…Unemployment Rate ticks up to 4.2%,” Maine wrote on X. 

The weak jobs report has even stirred a new debate, with US President Donald Trump claiming the data was manipulated – with no evidence. In response Trump fired the commissioner of the Bureau of Labor Statistics, Erika McEntarfer, as reported by ABC News. However, the surge in the unemployment rate weighed down on the market on Friday. 

Another factor contributing to the dip in the stock market is the new wave of tariffs which got into effect on August 1. While negotiations continue with some US trading partners, some have faced increased tariffs. 

Trump increased tariffs on Switzerland and Canada, for example, to 39% and 35%, respectively. Despite lack of immediate retaliation from these nations, the global trade tensions have escalated taking a toll on the market. 

On the other hand, some nations including China and Mexico have an extended 90-day period for tariff negotiations. Some of the countries that managed to secure early tariff deals include the UK, European Union (EU) and Japan, among others. 

Bitcoin Feels the Heat

As the stock market tanked, Bitcoin (BTC) also felt the heat. The king crypto dropped below $113,000 slightly before rebounding to $114,000. However, as of this writing, BTC is still feeling the heat as it trades at $113,854, per data by Coingecko. The current level means BTC is down by 1.6% over the last 24 hours. 

Further correction may be ahead if the macroeconomic scene worsens. Additionally, Coinglass data shows that over $716 billion has been wiped out from the crypto market over the last 24 hours. 

“In the past 24 hours , 163,990 traders were liquidated , the total liquidations comes in at $716.62 million”, Coinglass wrote.

Out of the total, Bitcoin accounts for $162.63 million in liquidations with $152.48 million long positions and $10.16 million shorts positions liquidated. In case this wave of liquidations increases, BTC could face a deeper downturn as selling pressure intensifies amongst short-term holders.