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Heavy selling continued in markets around the world on Monday amid the record fallout from President Trump's tariff plan. U.S. futures are deep in the red after having shed an astounding $5.4 trillion in value in the two days since the president revealed big-time tariffs on major companies. The S&P 500 is now at its lowest level in 11 months. Tokyo's Nikkei 225 index tanked 7.8%. Hong Kong's stock market nosedived about 12%, the worst day in more than 16 years. China's Shanghai Composite Index lost 8.4 percent. Yahoo Finance Executive Editor and host of Opening Bid Brian Sozzi breaks down the three things you need to know today to navigate this uncertainty.
I'm Yahoo Finance executive editor, Brian Sozzi, and here's what I have for you. Cover your eyes and hope for the best. It's what a lot of market pros are telling me right now. Heavy selling continuing in markets around the world on Monday. Tokyo's Nikkei 225 index tanks 7.8%. Hong Kong's stock market nose dived about 12%, the worst day in more than 16 years. China's Shanghai Composite Index lost 8.4%. Futures on the Dow Jones Industrial Average dropped more than 1,100 points. Here's what you need to know. Markets have shed an astounding $5.4 trillion in value in the last two days since President Trump revealed big time tariffs on major companies. The S&P 500 is now at its lowest level in 11 months. And recession models are working overtime at Goldman Sachs. For the second time in a week, Goldman Sachs chief economist, Jan Hatzius, has lifted his recession risk probability. Hatzius now sees a 45% chance of a US recession in the next 12 months, up from 35%. He expects the Fed to start cutting interest rates in June to jumpstart the US economy. And the bar is super high to wade into the market muck. The stock team at JP Morgan is staying bearish, despite the big pullback. They see, uh, they say they need five things before getting bullish. One, the trade news settles, of course. Two, tariff retaliation stops. Three, policymakers chill out on their fiscal consolidation drive. Four, Trump fires cabinet members. And five, the Fed tosses in the towel and cuts rates to prevent a crisis. Even tech isn't immune to Trump tariffs. The Amazon Prime printing press may not be able to blunt Trump tariffs. Amazon could see a $5 billion to $10 billion annualized operating profit hit from higher first-party merchandise costs due to tariffs, warns Goldman Sachs Tech analyst, Eric Sheridan, assuming no mitigating factors, such as cost cuts or vendor negotiations. Sheridan estimated Amazon's US merchandise costs would soar by 15% to 20%.