Increased risk of recession due to trade war and global slowdown, affecting stock market.

From Yahoo Finance: 2025-04-27 11:49:00

Morgan economists forecast a 40% chance of a recession within the next 12 months, up from 25% a month earlier. The firm cited the trade war and global economic slowdown as key factors in their revised forecast. JPMorgan Research predicts a 60% chance of recession in 2025, up from 40%. Trump’s tariffs, even with a 90-day pause, still pose a threat. The S&P 500 has seen ups and downs, with the possibility of a 10% correction. The Cboe Volatility Index VIX sits at 26.5, down from 52.

History shows that recessions can lead to negative returns for about 17 months on average. The Great Depression saw a 74% stock market decline. Chief global economist Bruce Kasman calls Trump’s tariffs “draconian” and believes they could push the U.S. into recession. Flexibility is key for investors.

Investors with retirement plans should remain flexible, as recession risks are high. Kasman warns that even scaled-back tariffs could trigger a recession. In uncertain times, it’s important to stay prepared and open to adjustments. Stay informed and be ready for change.

Read more: I have $300K in a 2025 target-date fund. Is there a chance it will recover?