Billionaire hedge-fund manager Paul Tudor Jones expressed on Tuesday that he anticipates stocks will likely reach new lows, regardless of potential reductions to aggressive tariffs on China by President Donald Trump.
“For me, it’s pretty clear. You have Trump who’s locked in on tariffs. You have the Fed who’s locked in on not cutting rates. That’s not good for the stock market,” Jones stated during an appearance on Finance Newso’s “Squawk Box.” He further predicted, “We’ll probably go down to new lows, even when Trump dials back China to 50%.”
These pessimistic remarks from the well-known investor follow Trump’s recent imposition of the highest tariffs on imports in decades, which has led to substantial volatility on Wall Street. The S&P 500 faced a significant sell-off but has since recovered much of its value, currently sitting about 8% below its record high.
This year, Trump has levied tariffs of 145% on Chinese imports, prompting a retaliatory response from China, which has enacted its own tariffs of 125%. Last week, China indicated that it is considering the possibility of resuming trade negotiations with the United States.
“He’ll dial it back to 50% or 40%, whatever. Even when he does that … it’d be the largest tax increases since the ’60s,” Jones noted. “So you can kind of take 2%, 3% off growth.”
As the founder and chief investment officer of Tudor Investment, Jones believes that the stock market has yet to find a bottom, as macroeconomic conditions continue to decline. The Federal Reserve has maintained its key overnight lending rate since December, keeping it within the range of 4.25% to 4.5%. Fed Chair Jerome Powell has stated that policymakers intend to “wait for greater clarity” regarding the implications of trade policies before making any adjustments.
“Unless they got really dovish and really, really cut, you’re probably gonna go to new lows,” Jones asserted. “And then when we hit new lows, the hard day will start to follow, and it’ll probably create the Fed to move, create Trump to move. And then we’ll get some kind of reality.”
Jones gained widespread recognition after correctly predicting and profiting from the 1987 stock market crash. Additionally, he serves as the chairman of the nonprofit organization Just Capital, which evaluates public U.S. companies based on their social and environmental performance.
