wall street rattled: trump's tariffs wipe out billions, stock targets slashed

2025-04-07 general

New York, Monday, 7 April 2025.
President Trump’s tariff policies are sending shockwaves through global markets. Wall Street firms, including Evercore ISI, are cutting stock targets. A staggering 7.9 trillion yuan was erased from the S&P 500’s market capitalization in just two days. Trump acknowledged the turmoil, hinting the market downturn is intentional. He urged Americans to ‘hang tough’ during this ‘economic revolution’. Meanwhile, the EU fears a flood of cheap goods and is scrambling to forge new trade alliances.

wall street reacts to tariff threats

Growing concerns over a potential trade war have prompted Wall Street firms to reassess their outlook on U.S. stocks [1]. The S&P 500’s market capitalization experienced a significant drop, plummeting by 7.9 trillion yuan in just two days last week [1]. This downturn has led Evercore ISI, among other financial institutions, to acknowledge that their initial 2025 targets were overly optimistic [1]. These revisions reflect increasing anxiety about the potential ramifications of escalating trade tensions on market stability.

evercore isi lowers s&p 500 target

Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, has revised the firm’s year-end target for the S&P 500 to 5600 [1]. While this new target represents an approximate 10% increase from the index’s closing value of 5074 on April 4, it marks a considerable shift from Emanuel’s previous projection of 6800 [1]. This adjustment follows President Trump’s announcement of broad tariff measures, which triggered disruption across global financial markets and unsettled investors for two consecutive days [1]. The firm also lowered its 2025 and 2026 earnings per share forecasts for the S&P 500 to $255 and $272, respectively [1].

market volatility and expert warnings

The S&P 500 has already fallen 17% from its February peak, nearing bear market territory [1]. Prior to Evercore ISI’s adjustment, RBC Capital Markets, Goldman Sachs Group, Barclays, and Yardeni Research also significantly lowered their year-end targets, citing uncertainties related to Trump’s tariffs [1]. Emanuel cautioned that prolonged uncertainty elevates asset volatility, erodes confidence, and could precipitate stagflation or a full-blown recession [1]. He noted Trump’s deal-making abilities could lead to a positive outcome but also risk retaliation and escalation [1].

trump defends tariff policy

President Trump addressed the market downturn, stating he doesn’t want stocks to decline but believes ‘sometimes you have to take medicine to fix something’ [2]. He defended his tariff plan as necessary to address the trade deficit with China [2]. Trump claimed the U.S. loses ‘hundreds of billions of dollars a year’ to China and insisted on resolving their surplus [2]. He mentioned discussions with European and Asian leaders regarding the tariffs, which are expected to take effect soon [2].

eu considers response to tariffs

The European Union is facing the risk of losing access to the world’s largest consumer market due to Trump’s tariffs [3]. Consequently, the EU is seeking alternative markets, with China being a statistically significant option [3]. However, the EU has frequently criticized China for overcapacity and market-distorting trade practices [3]. Despite these tensions, the EU and China have agreed to restart negotiations regarding tariffs on electric vehicles [3]. The EU is also preparing a list of retaliatory tariffs and seeking closer relationships with countries like India, South Africa, and Mexico [3].

analysts assess potential outcomes

Analysts suggest Trump’s tariffs could drive Chinese exports towards the EU, potentially straining relations if China floods the European market with cheap goods [3]. Ursula von der Leyen, European Commission President, warned that the EU would closely monitor the indirect effects of the tariffs and not accept dumping [3]. Noah Barkin, a China expert, anticipates the EU will likely use all available trade policy tools to respond to Beijing [3]. He said it is difficult to imagine this situation leading to positive outcomes for EU-China relations [3].

market losses quantified

The market impact of Trump’s tariff policies is substantial. Analysts estimate that global stock markets have already lost approximately $4.9 trillion in value [7]. The Financial Times reports that U.S. stocks alone have shrunk by $5.9 trillion in the past two days [7]. Trump shared a video on social media that suggested the market crash was intentional, further fueling uncertainty [7]. Despite the turmoil, Trump urged Americans to remain patient, asserting that this ‘economic revolution’ will ultimately lead to historic prosperity [7].

Bronnen

stock targets market volatility