Why Is the Stock Market Down Today? Sensex Crashes Around 800 Points; Fed, Weak Rupee, US Trade Uncertainty Triggers Market Meltdown- Top Reasons Behind The Fall

Stock Market Today: The Indian stock market wasn’t easy on the investors, and almost everyone wanted to unsubscribe from this “Monday blues” since the indices moved in such a confusing and chaotic way.

Over 800 points were lost by the Sensex, and it reached 84,906.90, the Nifty 50 fell to 25,902.95, and to intensify the already crazy situation, the midcap and small-cap indices went for a complete descent of over 2%. Ouch! Were investors feeling the consequences? Quite the opposite, over ₹7 lakh crore went off the BSE’s total market cap in just a few hours, coming down from ₹471 lakh crore to just under ₹464 lakh crore.

A day when losses piled up in the portfolios, and panic-stricken traders kept refreshing their screens trying to guess the situation better, really left them to wonder what was the better choice, tea, coffee, or meditation? If you felt your heart racing while watching those graphs, you can be sure that you were not the only one!

Stock Market Today: What Are The Major Reasons Behind The Meltdown?

Caution Ahead Of US Fed Policy

The main reason for today’s stock market downturn is the uncertainty regarding the US Federal Reserve’s rate decision on December 10. Of course, the market is predicting a reduction of 25 bps; however, investors are still nervous, just like someone who is waiting for a gift and at the same time worried about the wrapping, to use a metaphor.

This uncertainty has resulted in a wave of selling, as traders prefer to leave the market before any unexpected surprise comes out. What is more, if the Fed decides to keep rates unaltered, the US dollar may gain even more and this could result in the rupee being further devalued and FIIs exiting the market fast. It is no surprise that people are anxious.

Rupee Weakness: The Biggest Trigger

The Indian rupee is hovering around its all-time low, touching 90.15 against the US dollar. A spike in crude oil prices and persistent foreign capital outflows have further weakened sentiment. Despite strong GDP growth (8.2% in Q2FY26) and record-low inflation (0.25% in October), the rupee continues to slide, baffling investors.
And here’s the bigger problem: when the rupee weakens, it doesn’t fall alone, it pulls half the economy down with it. Imports get costlier, corporate expenses rise, fuel prices threaten to shoot up, inflation risks resurface, and foreign investors start packing their bags. In short, one slipping currency can trigger a whole domino effect of market panic.

Uncertainty Of The India–US Trade Deal

If the stock market had a relationship status today, it would be: “It’s complicated.” New Delhi and Washington have given out optimistic signs but still the India–US trade agreement is in the “almost there… maybe?” zone.

This week a high-level US diplomat will come to India for a new dialogue and that indeed seems to be a good sign but the investors have already lost their patience and are no longer waiting for any plot twist. Even S. Jaishankar suggested that there is movement but at the same time he reminded everyone that India will not be a party to any deal that does not ensure the protection of the farmers, laborers, and the middle class. The market will meanwhile hold its breath for the news and keep on refreshing the page like it is a cliff-hanger series.

Summing Up The Stock Market Today

To sum up, the stock market today fell but not because of a single culprit, it rather was a complete cast of economic twists. The decision hanging over the US Fed, the falling rupee that took down half the economy with it, and the indecisive India-US trade deal all contributed to the loss of confidence among the investors. Uncertainties worldwide and the withdrawal of foreign institutional investors (FII) added up to the perfect conditions for panic in the market. Despite the fact that India’s long-term prospects are still very positive, the short term might still feel like a thriller. For now, the best for the investors is to stay cool, stay updated, and buckle their seatbelts.

(With Inputs)

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