Will the Stock Market Crash if President Trump's Tariffs Cause a Recession? History Has a Clear Answer for Investors.
The S&P 500 (SNPINDEX: ^GSPC) nosedived after President Donald Trump unveiled a surprisingly severe slate of tariffs on April 2, a date he dubbed "Liberation Day." The benchmark index shed more than $6 trillion in the next five trading sessions and closed nearly 19% below its record high on April 8.Investors recently got more bad news: U.S. gross domestic product (GDP) decreased at an annualized 0.3% rate in Q1 2025, the first economic contraction since Q1 2022. That's particularly alarming because GDP rose 2.4% in Q4 2024, so the U.S. economy pivoted from growth to contraction remarkably quickly under President Trump.While GDP dropping in a single quarter doesn't mean the U.S. economy has entered a recession, it's undoubtedly a step in that direction. Economists surveyed by The Wall Street Journal put the odds of a recession in the next 12 months at 45% in April, up from 22% in January.Continue reading
The S&P 500 (SNPINDEX: ^GSPC) nosedived after President Donald Trump unveiled a surprisingly severe slate of tariffs on April 2, a date he dubbed "Liberation Day." The benchmark index shed more than $6 trillion in the next five trading sessions and closed nearly 19% below its record high on April 8.
Investors recently got more bad news: U.S. gross domestic product (GDP) decreased at an annualized 0.3% rate in Q1 2025, the first economic contraction since Q1 2022. That's particularly alarming because GDP rose 2.4% in Q4 2024, so the U.S. economy pivoted from growth to contraction remarkably quickly under President Trump.
While GDP dropping in a single quarter doesn't mean the U.S. economy has entered a recession, it's undoubtedly a step in that direction. Economists surveyed by The Wall Street Journal put the odds of a recession in the next 12 months at 45% in April, up from 22% in January.
