Stock Market Crashes On New US Tariffs; Sensex Drops 890 Pts, Nifty Plummets 240 Pts; 7 Big Movers Of The Day

The Indian stock market crashed sharply on June 3, 2026, after the US imposed a whopping 12.5% tariff on 60 countries, including India. The Sensex dropped by nearly 940 points and the Nifty 50 plummeted by 258 points. Among the biggest dragers were IT stocks. Also, the renewed tensions between the US and Iran have kept a potential ceasefire agreement uncertain, which added to investors' sentiment. Meanwhile, crude oil prices remain elevated, posing a great threat to India's import bills.

Sensex, Nifty Extend Crash

The Indian stock market opened on a bearish tone due to the renewed tensions in West Asia. US launched targeted attacks at Iran's Qeshm Islands, while Tehran attacked US bases in Kuwait and Bahrain. Accordingly, the hostility continued between US and Iran, dimming any hopes for a ceasefire extension.

"Indian equity markets opened on a weak note as renewed geopolitical tensions weighed on investor sentiment. Fresh military exchanges between the U.S. and Iran have raised concerns over the stability of the recently announced ceasefire, increasing uncertainty and prolonging the ongoing conflict. The latest escalation has dampened global risk appetite and added pressure on emerging markets, including India," Ponmudi R, CEO of Enrich Money.

However, the selloffs intensified right after new tariffs were reported.

Sensex dropped by nearly 930.48 points to hit an intraday low of 73,719.36. Meanwhile, Nifty 50 plunged by 257.85 points to hit an intraday low of 23,483.55.

Currently, both the benchmarks are down by more than 1% each. On the contrary, India's volatility index skyrocketed by over 6%. Here are some of the big movers in the market.

1. US Imposes 12.5% Tariffs

In a statement, the United States Trade Representative (USTR) proposed additional duties on all products of the investigated economies. These are some 60 countries, including India, China, Australia, Canada, Singapore, Qatar and Saudi Arabia, among others.

According to USTR, a 10% tariff of additional duties is imposed on economies that impose a forced labor import prohibition, that have committed to impose and enforce such a prohibition through an Agreement on Reciprocal Trade, or economies that have imposed a partial regime with the effect of preventing the importation of certain forced labor goods. Meanwhile, a 12.5% extra tariff is levied on all other economies.

2. IT Stocks Nosedive

IT stocks erased their yesterday's gains to nosedive enormously. Heavyweight tech stocks like TCS, Tech Mahindra, HCL Tech, and Infosys plummeted by 4% to 8%. The Nifty IT index has declined by nearly 5%.

All other indices are in deep red as well. Nifty Financial Services, Nifty Metal, Nifty PSU Bank, Nifty Consumer Durables, and Nifty Cement dropped by over 1% each.

3. Realty Stocks Under Pressure Ahead of RBI Policy

Realty stocks were among the top draggers of the Indian stock market. The Nifty Realty index crashed by more than 2% ahead of RBI's monetary policy. Due to West Asia war, inflationary pressure has heightened, which signals monetary policy tightening globally. In the pre-West Asia war, the market had predicted two to three rate cuts in 2026. But that trajectory is long gone and now expectations of a hawkish policy stance and rate hike have escalated.

A rate hike makes home loans expensive and further impacts real estate market. Hence, investors will eye RBI's policy decision on June 5th.

4. Midcaps & Smallcaps Fall Too

Nifty Midcap and Nifty SmallCap indices also witnessed significant downside by over 1%. Among Midcaps, top losers were Persistent Systems, Coforge, Prestige, Mphasis, PolicyBazaar, and AU Small Finance Bank which tumbled by 2.5% to 5%.

Under smallcaps, Schneider, Eclerx, Sonata Software, Birla Software, and NATCO Pharma which plunged by 4.5% to 5%.

5. Crude Oil Prices Elevated

US WTI Crude Oil and Brent Crude surged by 1% each to trade around $95 per barrel and $97 per barrel.

As per Ponmudi, crude oil prices remain elevated, currently trading in the $94-96 per barrel range. Although lower than recent highs, current price levels continue to pose challenges for India's import bill, inflation outlook, and corporate profitability.

6. Rupee Weakened

Rupee weakened to trade at 95.68 per dollar level, pulling awat from multi-week highs on fresh Gulf tensions that lifted crude oil prices.

As per Trading Economics, market pressure intensified after US-Iran diplomatic efforts failed to make progress. The escalation contributed to a third straight daily increase in oil prices, with Brent crude advancing 1% to nearly $97 per barrel. At the same time, continued foreign portfolio outflows added to the rupee's weakness as foreign investors were net sellers of more than $800 million worth of Indian equities on Tuesday.

7. Global Market Trends:

Indian equities toppled despite Asian cues trading higher. The MSCI Asia Pacific Index rose by nearly 1% to hit an all-time high. The Japan's NIKKEI 225 index rose by nearly 3%, while Taiwan's TAIEX index soared by nearly 2%. The Australian market is also trading higher by 1%, while South Korea's KOSPI is marginally up.

Overnight, the Dow advanced 0.45%, the S&P 500 gained 0.13%, and the Nasdaq Composite edged up 0.03%. Eight of the 11 S&P sectors closed in positive territory, with utilities, materials, and industrials leading the gains. Technology shares also remained in focus, particularly among semiconductor manufacturers and AI infrastructure firms. Hewlett Packard Enterprise jumped 19.5% after raising its outlook on the back of strong AI-related demand, as per Trading Economics.

Stock Market Outlook

Overall, Ponmudi said, market sentiment remains cautious to negative following the weak opening. The renewed military exchanges between the U.S. and Iran have overshadowed earlier hopes of de-escalation, keeping investors on edge. Elevated crude oil prices and continued pressure on the rupee remain key concerns. While any meaningful progress in peace negotiations or a sharp correction in oil prices could improve sentiment, further escalation may trigger additional volatility and selling pressure in the near term.