1. Citigroup estimates a 40-45% chance of U.S. recession amid tariff impacts. 2. Tariffs on China could negatively affect broader markets, including S&P 500.
A potential recession often leads to reduced consumer spending and corporate earnings, negatively affecting stock prices. Historical examples include the 2008 recession, which saw significant declines in the S&P 500.
Recession fears stemming from trade policies significantly affect investor sentiment and market performance. Given the S&P 500's sensitivity to macroeconomic indicators, this forecast could influence stock prices profoundly.
Economic uncertainty and potential recession fears can immediately impact market sentiment. Similar patterns were observed during trade tensions in 2019, where S&P volatility increased swiftly.