The Trump administration’s newly imposed tariffs have sent shockwaves through the financial markets. Sanctuary Wealth’s chief investment strategist, Mary Ann Bartels, described the proposal as a “worst-case scenario” that was not priced into the market. Looking ahead, she predicts that the S&P 500 Index (SPX) could face a decline of up to 20%.
The tariffs, which include a minimum 10% baseline levy on imports and rates as high as 49% on goods from specific countries, have already rattled markets. The S&P 500 fell over 4% on Thursday morning, officially entering correction territory.
Bartels noted that if the index fails to hold the critical 5,500 support level, investors could see further declines, potentially bottoming between 5,200 and 5,400.
Tariffs Might Trigger Global Recession
The proposed tariffs could hurt the economy, and Bartels warns they might cause a slowdown or even a recession in the U.S. and worldwide. She believes the administration may be aiming to slow the economy to pressure the Federal Reserve to lower interest rates and facilitate debt restructuring.
Importantly, the March Jobs report, due today, is seen as a key indicator for the Fed’s next move. A weakening labor market could prompt the Fed to cut interest rates sooner than anticipated.
Investors Could Eye ETFs During Tariff Chaos
This tariff-induced market turmoil reflects the potential for significant economic and financial fallouts, prompting investors to adopt a cautious stance. Thus, investors could closely monitor some market-tracking ETFs such as (SPY), (QQQ), (DIA), (VOO), (IVV), and (IWM).
According to the TipRanks ETF Comparison tool, analysts see the most upside potential in the IWM ETF of 45.9%, followed by the QQ ETF of 33.3%. All other ETFs are also expected to surge over 20% in the next 12 months.
