With President Donald Trump’s April 2 tariffs looming, the stock market appears to be responding to their potential impact on the economy, as stocks fell sharply on Monday.
According to a report from CNBC, the broad market index was down more than 10% below a record set in February on Monday while also hitting its lowest level since September.
Tech companies have been among those most affected, with Nvidia having dropped 4.3%, while Meta Platforms fell 2.6% and Tesla lost 5.3%.
Ancora portfolio manager and managing director David Sowerby recently spoke with WWJ Newsradio 950 about the reactions from Wall Street, noting that prices falling can almost certainly be tied to the Trump administration’s actions.
While the president continues to refer to April 2 as “Liberation Day,” Sowerby says he’s not sure it’s going to be very liberating for the economy.
Sowerby says that at this time of the year, investors would typically be watching things like car sales, manufacturing activity, the jobs report,” and more, but instead many are watching the president with worry.
“That in itself is creating what we know is uncertainty. Markets we know don’t like uncertainty. And as a result, we’re seeing more talk about recession probability going higher,” Sowerby said, adding that estimates have the possibility of a recession at “somewhere around 30%” in 2025.
While those projections are nowhere near a guarantee, Sowerby says that it’s still a step “in the wrong direction.”
Other projections Sowerby says don’t fare well for the economy are corporate profits, which, paired with other factors, show a rough road ahead.
“Corporate profits were expected to be up about 12% this year. Now those estimates are being reduced with economic uncertainty,” Sowerby said. “So much hinges on that tariff news on Wednesday. I’m not sure we’re going to get a lot of material news or how it all plays out. Nevertheless, higher probability of recession, slower profit growth, slower consumer spending, and a first quarter for the stock market where the S&P 500 is down 5%.”
He added that investors shouldn't expect anything “good when we open our statements in the next couple of weeks.”