The US stock market has gotten off to a shaky start in 2025. However, things took a turn for the worse with the arrival of US President Trump’s Liberation Day economic policy. Indeed, Goldman Sachs has recently said that the Trump tariff plan now puts the US in an ‘event-driven’ bear market.
Wall Street rebounded notably to start Tuesday before things plummeted. Specifically, the Dow Jones Index erased 1,400 points gained after the Trump administration announced it would be placing 104% tariffs on China. With many expecting a trade war, experts are not optimistic about what this could mean for investment markets in the short term.
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Goldman Sachs Speaks on Trump Tariff-Driven Bear Market of 2025
There is no denying that the US stock market is in a concerning spot just three months into the year. Mega-cap stocks like Nvidia (NVDA) and Tesla (TSLA) had been declining and failed to find footing. However, the arrival of a new and increasingly aggressive economic policy by US President Trump has only exacerbated the concern.
Now, things are expected to get a lot worse before they ever can get better. Indeed, Goldman Sachs recently said that the new Trump tariff plan put the US in an ‘event-driven’ bear market. Moreover, their sentiment arrives as banks like JPMorgan have increased their recession risk for this year.
According to a CNBC report, Goldman Sachs expressed concern that the bear market could become “cyclical” amid concerns regarding the economic policy. Specifically, they worry that the risk of retaliation will only increase the fragility of the county’s economy.
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“We argue that we are currently in an event-driven bear market,” the bank’s chief global strategist, Peter Oppenheimer, said. “The event in this case was ‘Loberation Day’ and the sharp rise in tariffs it triggered.”
“Indeed, this could be seen as self-inflicted, given the strong prospects for global economic activity at the start of the year, particularly in the US, where our economists had put the probability of a recession at 15%,” he added.
The tariff plan has seen their economists lower the 2025 Q4 GDP growth forecast by 0.5%. Moreover, they have increased the nation’s recession probability to 45%. With new import duties arriving in an answer to China’s opposition, things may only get more worrisome.