President Trump's tariffs and the market volatility it has created are to blame for stocks sinking, companies delaying their IPOs and Federal Reserve Chairman Jerome Powell warning inflation could rise.
Yahoo Finance Senior Reporter Alexandra Canal joins Yahoo Finance Head of News Myles Udland to discuss what some of Wall Street's top strategists are saying.
To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here.
Right with the vibes and the prices on Wall Street tanking this week after President Trump's aggressive tariff rollout sparked recession fears and pushed markets to the brink. The Nasdaq ended the week in bare market territory. The Dow dipped into correction. The S&P logged its worst five-day stretch since 2020. Here to tell us all the cheery news and what economists and strategists have to say about it is Yahoo! Finance senior reporter, Alexandra Canal. Uh, so, I mean, where where do we where do we begin? How did folks work through this in real time, I guess, is really the question.
I know. Well, first of all, I feel like I haven't even fully processed the magnitude of this week. Maybe it's because we've been in it, but this is history, baby. I mean, this is like pretty insane, the levels that we're seeing and really the reaction in markets that we've seen since Wednesday when these tariffs were first announced. But while talking with Wall Street strategists, economists, parsing through a lot of these notes, what really hits home is the uncertainty of it all and really the different scenarios that could play out here. Uh, you were talking to Joe Brusuelas, RSM chief economist, earlier today, and he brought up what could happen if the EU retaliates. We saw that retaliation from China earlier today. They're slapping on 34% tariffs on us, matching what we did on the retaliatory side. And if the EU responds in a similar fashion, what could that mean, not only on the tariff side, but also when you think about antitrust, when you think about big tech, what is the ripple effect there? And really the the theme and the thread through here is that things could get a lot worse. So I want to play a little bit of what the top voices on Wall Street had to tell us this past week. Take a listen.
The reality is the issue of tariffs and its impact on the economy, it's going to take a while to sort it out.
Right now, it's a rather intense period. We do have the certainty of the announcement, but now there's the uncertainty about how is this possibly resolved and at what level do the tariffs eventually settle at. So we think that it's actually understandable why the market would react in a negative way for to the announcement, but we don't think it necessarily needs to with the uncertainty.
We have these very large tariffs that are in place or are supposed to be put in place over the next week or two. Uh, but the president is talking about potentially rescinding at least part of them. How do you make a decision under those circumstances? You simply can't.
And to that point on the business side, earlier today we had a slew of reports that companies like StubHub, Klarna, uh, Fintech company Chime, at tech company Mountain, they are delaying their respective IPOs. So we have this freeze in the IPO market, clearly a freeze on the corporate side when it comes to businesses. Consumers clearly don't know what to do. We've seen that in the sentiment data and the soft data. They've potentially been pulling back, and all of that is leading to a lot of this fear that maybe we're entering a recession or a period of stagflation.
Yeah, you know we had Ed Yardeni at the top of that clip, and he's among a growing number of folks on Wall Street who have now cut their price target, Wall Street strategists cut their price target. He has Most of the bulls, he still is pretty bullish. He had S&P 7,000. Uh, I believe it was his initial call, but uh, Lori Calvasina over at RBC, she's now at 5,500. Uh, the folks over at Capital Economics, they are now at 5,500 on the S&P, and of course, we finished the week below those levels. So, I think where things open on Monday, how we all start to recalibrate expectations for this year, how bears turn back into bulls, but it's, you know, bullish to be S&P 6,000 or whatever it is.
Right. And Ed Yardeni, to that point, is at 6,100 right now. He did say it's too late to panic in the sense that you shouldn't have this knee-jerk reaction to stocks right now, that you should sort of wait and see how this all plays out because the tariff fallout, it's only going to continue in the days and the weeks ahead. I don't know if anyone has the answer.
