Put down the razor blade, get the gun away from your forehead, close the window, and back away from the glass. Ther.is no reason to commit suicide. As FDR said, “There is nothing to fear but fear itself,
Okay, enough of the hyperbole. The news is that the stock market is back to where it was before President Trump announced the “Liberation Day” tariffs. In four days, the S&P 500 plummeted approximately 12%, while the Dow Jones Industrial Average lost nearly 4,600 points, equating to an 11% drop.
As the experts and I have said, when the stock market goes down, it comes back up pretty fast—some faster than others. This one didn’t have a real economic reason; it was only fear of what might happen: a recession because of the tariffs and recovery because of what may happen; tariff deals are close to being executed. As for China, its economy is feeling the pain and might be looking for an “honorable” ramp-off.
The entire time the stocks were down, Trump was being a cheerleader.
On Friday, 5/3, stock prices were back to pre-liberation day levels. On the 5th, the market inched down because no deals had been announced yet, and there were worries about the Fed announcement on Wednesday, the 7th. But that is the stock market acting normally.
Two news items might affect the market. If the Fed leaves the interest rates where they are, the market will fall downward but not to a bear market level. This disappointment is probably already built into stock prices. If the Fed lowers the rate, look for stock prices to jump. The market likes good surprises.
The other new item is the tariff negations. When the President announces successful tariff deals, the market will rise. But you won’t see a giant jump until a deal is made with the big kahuna-China.
Keep your eyes out for market news. As the market news changes, so will any predictions.
