The stock market just had its worst day in five years. Yesterday, the S&P 500 dropped nearly 5%, the Dow lost 1,679 points, and the Nasdaq composite plunged 6%. The pain continued in after-hours trading and Asia markets.
Wall Street was rattled following President Donald Trump's latest round of tariffs:
"There will be blood," JPMorgan's chief global economist told clients in a research note.
"Never before has an hour of Presidential rhetoric cost so many people so much," former Treasury Secretary Larry Summers wrote on X.
"This is not a buy-the-dip opportunity. It's a sell the dip opportunity," Boaz Weinstein, Saba Capital Management's founder, wrote in a social media post.
BI rounded up what some of the smartest people in markets and economics are saying about Trump's tariffs. Read their thoughts here.
After Thursday's hammering, one question is on every investor's mind:
Where do markets go from here?
The coming earnings season could push markets back up. But importantly, first-quarter earnings data won't reflect the impacts of the new tariffs on companies' bottom lines. Those will be felt starting this quarter, BI's Max Adams writes.
Bank of America analysts wrote on Thursday that, assuming tariffs lead to higher costs for companies and lower demand from consumers, S&P 500 earnings per share could fall as little as 5% — or as much as 32% if countries retaliate, which some have already vowed to do.
Even following yesterday's steep losses, the stock market is still not cheap. That's a reason for investors to brace for more plunges as the worst-case scenarios get baked into valuations in the coming weeks.
Buckle up.
3 things in markets
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1. Rate-cut bets are soaring. President Trump delivered higher-than-expected tariffs, surprising analysts and amplifying recession outlooks. Now many investors are bolstering bets that the Federal Reserve will have to slash interest rates this year.
2. Musk's Tesla leadership in question. The White House denied a Politico report this week about Elon Musk's exit from government, but early Tesla backer Ross Gerber told BI it doesn't matter either way.
3. Ken Griffin's advice to high schoolers. Billionaires were once teenagers, too. The Citadel CEO returned to his Florida alma mater to talk about "Call of Duty" and falling short on a chemistry exam, and to give a little career advice. BI got a transcript of the event.
3 things in tech
Anna Orlova/Getty, solarseven/Getty, Tyler Le/BI
1. How do you stop AI from spreading abuse? BI obtained training docs from Outlier and its owner Scale AI that offer a rare look into how freelancers stress-test AI with "harmful" prompts. The leaked materials provide a litany of disturbing examples that humans are paid to write. Read our exclusive here. Content Note: This story mentions animal abuse, domestic abuse, and suicide.
2. Tariffs' ripple effect on startups and VCs. Fundraising challenges, shelved IPO plans, and supply chain disruptions are among the possible concerns.
3. Will TikTok get banned for real? Even if US investors come to the app's rescue, it depends on whether ByteDance would agree to a deal — and/or whether the Chinese government would allow it. BI's Peter Kafka has a hunch about what will happen: nothing.
3 things in business
Getty Images; Jenny Chang-Rodriguez/BI
1. How Lonely Planet lost its way. Once America's favorite travel guide, Lonely Planet has struggled to find a foothold in the internet age. Facing competition from Yelp, Google Reviews, and a host of travel bloggers and influencers, it now risks taking a permanent vacation.
2. Deloitte is preparing for layoffs. The Big Four firm was hit hardest by DOGE's consulting crackdown, with at least 127 of its federal contracts cut or modified. Three current Deloitte employees told BI they heard about the company's plans for layoffs.
3. Automakers react to Trump's tariffs announcement. Ford is giving customers an employee discount, Stellantis has paused some production, and Volkswagen is tacking on an "import fee."
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York (on parental leave). Hallam Bullock, senior editor, in London. Nathan Rennolds, editor, in London. Grace Lett, editor, in Chicago. Amanda Yen, associate editor, in New York. Lisa Ryan, executive editor, in New York. Meghan Morris, deputy bureau chief, in Singapore. Ella Hopkins, associate editor, in London. Elizabeth Casolo, fellow, in Chicago.
