After Friday’s market slump, things can't be any worse today can they?

Friday’s 6% Wall Street slump will have led to an anxious weekend for investors and their advisors, but is worse yet to come?

The rout in the previous session was the second sharp fall in as many days as President Trump’s tariffs dominated investor sentiment. And while the latest US jobs report gave some reassurance that the economy is strong – for now – this week is likely to bring new challenges.

“[The] better-than-expected jobs report will help ease fears of an immediate softening in the US labor market. However, this number has become a side dish with the market just focusing on the entrée: tariffs,” commented Lindsay Rosner, head of multi sector fixed income investing at Goldman Sachs Asset Management.

Stock market futures suggest investors are set to see more of the negativity that saw $5 trillion wiped off the market cap of US listed companies at the end of last week with the Dow Jones, S&P 500, and Nasdaq all down by more than 3% as of 5am ET Monday.  

Even before the devastation of the final two days of last week, retail investors were firmly in bearish mood. The AAII Sentiment Survey - an outlook of whether investors feel stock prices will rise, fall, or stay the same over the next six months - saw bearish sentiment rise 10 percentage points to 62%, the third highest reading in its history and the highest since March 2009 (70%). Bullish sentiment fell 6 points to 22% and neutral sentiment was down 4 points to 16%.

And some wealthy US individuals are choosing to move their money abroad. Wealth mangers in the UK including Rathbones, RBC Brewin Dolphin, Evelyn Partners and Schroders Cazenove have told the FT that client inquiries about offshoring their wealth have been intensifying in recent months.

The impact of costlier imports ignites fears of higher prices for American consumers and industry, but exporters are still uncertain about how the world’s economies will react, impacting US exports and the economy.

“If the announced tariffs stand, it is estimated that the total impact is equivalent to a tax hike of around $640 billion to US consumers which is the equivalent of about 2% of US GDP,” said a spokesperson for $9.5B firm Bel Air Investment Advisors. “Clearly, this would have a negative impact on US GDP growth and corporate earnings, with some economists estimating that this could result in a 1% reduction to US GDP growth and significantly increase the odds of a recession or stagflation.”

During Trumps ‘Liberation Day’ proclamation, Canada avoided additional tariffs beyond those that were already announced, but consumers north of the border are voting with their wallets and cutting back on buying American goods, while businesses are reassessing supply chains.

Paul Feinstein, founder and CEO of Audent Global Asset Management warns of the damage that trading partners determining that the US supply chain is no longer stable, will likely do to the US economy.

“One data point we’re watching closely is Atlanta Fed’s GDPNow, which gives a real-time snapshot of GDP before the official Q1 number is released,” he said. “Tuesday’s updates to manufacturing and construction spending dropped Q1 GDP expectations to -3.7%, as fears of broad tariff impacts drive concerns about stagflation —higher inflation plus recession. If this plays out in the final Q1 GDP report, it would mark the worst economic contraction since the 2008 crash (excluding COVID).”