JPMorgan analysts have raised the recession risk to 60 percent as the stock market tumbled following President Donald Trump’s “Liberation Day” tariffs announcement.
Trump announced at least 10 percent blanket tariffs on all countries — except for Russia — Wednesday, sending investors into a panic. The Dow dropped 1,000 points at opening on Friday after China placed retaliatory 34 percent tariffs on U.S. goods. That followed a historically bad day Thursday for the Dow and NASDAQ stock markets, which saw significant drops in both.
Investors fear the impact of the tariffs, which many have predicted will raise prices for consumers.
The NASDAQ is on track to fall 20 percent or more below its recent peak by closing Friday, according to the Wall Street Journal.
JPMorgan analysts had the recession risk at just 40 percent before Trump’s tariff announcement. The last time the increase was that large was in 1968 — and it was followed by a recession, JPMorgan economists noted.
It’s also possible the U.S. will enter a recession while the rest of the world is spared, according to analysts.
Federal Reserve Chair Jerome Powell said Friday that Trump’s tariffs will likely raise inflation and slow economic growth. Trump called on Powell to cut interest rates minutes before his speech.
“He is always ‘late,’ but he could now change his image, and quickly,” Trump wrote on Truth Social.
“CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS,” he added.
The Dow saw a point drop Thursday that ranked in the top five worst of all time, while the NASDAQ also suffered its most significant one-day point drop in the market’s history on Thursday. The S&P 500 also saw its biggest one-day drop since March 2020 amid the COVID-19 pandemic.

But Trump and his allies insist the market is healthy, despite these massive drops.
“I think it's going very well,” Trump said of the stock market Thursday. “It was an operation. I like when a patient gets operated on and it's a big thing.”
He continued to defend his move Friday, writing on Truth Social it is a “great time to get rich, richer than ever before.”
“TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE,” he added.
Secretary of State Marco Rubio similarly defended the tariffs, saying he’s confident the markets will bounce back.
“Businesses around the world, including in trade and global trade, they just need to know what the rules are,” Rubio said from a NATO meeting in Brussels on Friday. “Once they know what the rules are, they will adjust to those rules.”
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