Betting markets now show a 62 percent chance that the U.S. will plunge into a recession this year.
The odds of such an economic drop spiked last week after President Donald Trump announced on his so-called ‘Liberation Day’ on Tuesday, April 2 the latest round of international tariffs.
That day, the odds of recession went from 39 percent to 49 percent, according to Polymarket.
And on Sunday the chances reached a high of 66 percent, showing a whopping two in three chances that a recession in nearing.
Wall Street braced on Monday for a repeat of the late 1980’s ‘Black Monday’ after last week’s brutal sell-off left investors stunned and worried about an impending financial crisis.
The October 19, 1987 crash saw a 22.6 percent drop in a single day and remains the worst stock drop in modern market history, far eclipsing the chaos of 2008 or even the COVID crash just five years ago.
The widespread sell-off has already hammered everyday Americans’ 401(k)s and other retirement savings, causing a chain reaction with many pulling their money, lowering their contributions or selling off their options.
Betting markets are nearing a 70 percent chance that the U.S. enters a recession in 2025 after Donald Trump’s tariffs last week led to a historic crash that have economists and financial analysts warning of another ‘Black Monday’
Trump claimed Sunday night that world leaders are ‘dying to make a deal’ after he imposed a slew of tariffs on trade partners of both friend and foe nations.
But bettors are not convinced.
Since January, the odds remains below 30 percent that the U.S. would experience a recession in 2025. But now, the odds are up 43 percent and are nearing 70 percent.
The president denied over the weekend that he was intentionally engineering a market selloff and insisted he could not foresee market reactions, saying he would not make a deal with other countries unless trade deficits were solved.
‘Sometimes you have to take medicine to fix something,’ he said of the market pain as he continues comparing the economy to medicine and surgery.
Plummets began last week for the S&P 500, Nasdaq, and Dow — the three main U.S. stock market indices – after Trump held his so-called Liberation Day event.
But the fall went even further at the opening bell on Monday and fears are spreading of worldwide recessions.
Early Monday morning trading in Asia tanked, including on Japan’s Nikkei, which cratered as much as 8 percent, and in China by almost 5 percent.
Trump’s latest round of tariffs have led to chatter of a worldwide crash and recession, but the president isn’t backing off
Australia was down 6 percent, South Korea 5 percent, Taiwan almost 10 percent, Singapore 8.5 percent and Hong Kong 10 percent.
And financial analysts fear last week’s $6.6 trillion wipeout is just the beginning.
CNBC host and market analyst Jim Cramer warned the U.S. it’s barreling toward another Black Monday.
‘If the president doesn’t reach out and reward countries and companies that follow the rules, then the 1987 scenario… where we dropped for three days and then plunged 22 percent on Monday, becomes highly relevant,’ Cramer said during his show over the weekend.