The hurdle to buying stocks amid the current Trump tariff policy-driven market rout is very high.
That’s the warning from JPMorgan’s head of global equity strategy Mislav Matejka.
“In order to be sustainably buying equities, beyond just technical bounces, we would need to see trade news flow to settle — for retaliations to be out of the way, also a reversal in fiscal consolidation drive, where certain departures from current administration would need to happen, and would need to see Fed capitulation, but that is likely only after the payrolls falter,” Matejka wrote in a note on Monday.
US markets are “not a good place to hide,” Matejka warned. Tech stocks and the US dollar should not be viewed as relative safe-haven plays right now.
“We believe that one should stay cautious on risk,” Matejka added.
Markets have shed an astounding $5.4 trillion in value in the two days since President Trump revealed big-time tariffs on major countries last Wednesday. The S&P 500 (^GSPC) is now at its lowest level in 11 months, with pros saying the carnage may not yet be over.
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Heavy selling continued in markets around the world on Monday.
Tokyo’s Nikkei 225 (^N225) index tanked 7.8%. Hong Kong’s stock market nosedived about 12% in its worst day in more than 16 years. China’s Shanghai Composite Index lost 8.4%.
Futures on the Dow Jones Industrial Average (YM=F) dropped more than 1,100 points.
Buzzy numbers in the markets are starting to surface during the carnage.
For instance, the S&P 500 is down 17% from its February highs — a stone’s throw away from entering a bear market by being off 20%.
Including dividends, the S&P 500 is now down 13.4% so far in 2025, according to data crunched by Creative Planning chief markets strategist Charlie Bilello. Since 1990, only two years have had a worse start: 2001 and 2020.
Every stock in the closely followed “Magnificent 7” is down by more than double-digit percentages this year, led by a 40% plunge in Tesla (TSLA). Nvidia (NVDA) is a close second with a 30% drop.
“I’m already overweight utilities, which is expensive,” RBC Capital Markets strategist Lori Calvasina told Yahoo Finance. “So we want to hunt for bargains. But for a lot of these sectors, it’s hard to say what reasonable EPS assumptions are. All I know is that there are some sizable downward revisions coming.”
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
