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CNBC host and veteran market commentator Jim Cramer is raising alarm bells following President Donald Trump’s sweeping tariffs announced on April 2 — warning the market could be on the verge of a crash reminiscent of 1987’s “Black Monday.”
“If the president doesn't try to reach out and reward these countries and companies that play by the rules, then the 1987 scenario... the one where we went down three days and then down 22% on Monday, has the most cogency,” Cramer said, referencing the historic single-day collapse of the Dow Jones Industrial Average. “We will not have to wait too long to know. We will know it by Monday.”
Black Monday refers to October 19, 1987, when stock markets around the world crashed in a single day — led by the Dow Jones Industrial Average, which plunged 22.6%, its worst one-day percentage drop in history.
A combination of fears about rising interest rates, high valuations, geopolitical tensions, and the rise of computerized program trading created a perfect storm. Once the selling started, algorithms triggered more selling — leading to a snowball effect.
On April 2, Trump unveiled a 10% blanket tariff on all imports, with harsher levies for specific countries set to take effect on April 9 — including 34% on China and 26% on India. In response, China imposed retaliatory tariffs, intensifying global fears of a prolonged trade war.
Markets did not take kindly to the news. The Dow plunged 2,231 points on Friday after a 1,679-point drop Thursday — marking the worst two-day slide since the early days of the COVID-19 pandemic. The Nasdaq dropped 962.82 points (5.8%), and the S&P 500 fell 322.44 points (5.97%).
“It’s tough to build a new, weaker, world order on the fly,” Cramer said. “Frantically trying to do it but don’t see anything yet that takes the October 87 scenario off the table. Those who bottom-fished are sleeping with the fishes…so far.”
Still, Cramer noted the strong employment report as a possible buffer: “It makes it less likely a crash will necessarily lead to a recession.”
“I will contain my anger, but only because I lived through ‘87 and in the end, I came out okay. I was in cash for the crash. I know what this feels like,” he added.
In January, Cramer offered his take on Bitcoin — and drew a line between the asset itself and its biggest corporate backer. “If you want to own bitcoin, (you) own bitcoin,” Cramer told a caller. “I own bitcoin, you should own bitcoin. Bitcoin is a great thing to have in your portfolio.” But then came his sharp distinction: “But not MicroStrategy,” he said, without elaborating further.