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‘Stocks Will Hit New Lows,’ Warns Billionaire Investor Paul Tudor Jones

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Billionaire hedge fund manager Paul Tudor Jones warned on Tuesday that stocks are likely to fall to new lows.

‘Stocks Will Hit New Lows,’ Warns Billionaire Investor Paul Tudor Jones

Billionaire hedge fund manager Paul Tudor Jones warned on Tuesday that stocks are likely to fall to new lows, even if President Donald Trump eases his tough stance on tariffs against China. Speaking on CNBC’s “Squawk Box,” Jones said that the stock market is facing pressure from two sides. The first side is Trump remaining firm on tariffs, while the second side is the Federal Reserve refusing to cut interest rates. As a result, he believes that this combination creates a difficult environment for stocks and expects prices to drop even if tariffs are reduced to 50%.

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Jones made these remarks after markets were rattled by Trump’s decision last month to impose the highest tariffs on imports in decades. This led to heavy selling on Wall Street, although the S&P 500 (SPY) has since recovered much of the losses and now trades about 8% below its record high. Trump’s tariffs, which stand at 145% on Chinese goods, caused China to retaliate with 125% levies. Interestingly, China recently suggested it may reopen trade talks with the U.S., but Jones remains skeptical that this will help much. Indeed, he explained that even reducing tariffs slightly would still represent a massive tax hike that would likely cut economic growth by 2% to 3%.

Looking ahead, Jones, who gained fame for predicting the 1987 stock market crash, believes that stocks still haven’t bottomed. He pointed out that the Federal Reserve has kept rates steady since December, with Chair Jerome Powell signaling no cuts until trade uncertainty clears. Jones argued that unless the Fed turns more aggressive with its rate cuts, markets will likely continue falling. He said that once the new lows are reached, then pressure will build on both the Fed and Trump to make meaningful adjustments to stabilize the economy and financial markets.

Is SPY a Buy Right Now?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust (SPY) based on 409 Buys, 88 Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPY price target of $657.34 per share implies 17.3% upside potential.

See SPY’s holdings

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