Why is the stock market down today? Sensex drops over 600 pts, Nifty below 24,800 — key reasons behind the slump

Indian benchmark indices Sensex and Nifty slumped on Tuesday, after the United States issued a draft notice to impose tariffs of up to 50% on Indian goods starting Wednesday. The trade shock was the biggest drag on sentiment, with investors also digesting other pressure points, from currency moves to foreign investors selling, compounding the decline.

At 9:40 a.m., the S&P BSE Sensex fell 652.58 points, or 0.80%, to 80,983.33, while the NSE Nifty 50 dropped 196.10 points, or 0.79%, to 24,771.65.

Here are the seven key factors behind today’s decline:

1. U.S. tariffs take effect at midnight

Markets soured after President Donald Trump unveiled an additional 25% tariff on Indian exports tied to India’s Russian oil purchases, doubling existing levies to 50%. A draft notice from the Department of Homeland Security on Monday laid out implementation procedures, while a planned Aug. 25–29 visit by U.S. trade negotiators to New Delhi was abruptly cancelled.

With Indian exporters now facing some of the highest U.S. duties globally, well above rivals such as Vietnam and Bangladesh, investors had hoped for a delay or compromise. Instead, confirmation of the tariffs erased those expectations and hit sentiment in early trade.
The new duties will apply to goods entering the U.S. for consumption or withdrawn from warehouse for consumption from 12:01 a.m. EDT on Wednesday, or 9:31 p.m. IST, according to the Homeland Security notice.