The stock market has experienced its most significant drop since the pandemic, with the S&P 500 falling roughly 9% between March 31 and April 4 in a tariff-fueled sell-off. Market experts suggest that the recovery may differ from the pandemic, where the Federal Reserve’s quick intervention through interest rate cuts alleviated some economic strain. Renaissance Macro’s head of economics, Neil Dutta, stated, “This is a confidence shock, and so it’s going to take a little bit of time to get that back.” The recent market turmoil has primarily been attributed to President Trump’s introduction of massive tariffs, which have negatively impacted both consumer and business sentiment regarding the US economy.
Our stock market is down. Bond yields are up and the dollar is declining. These are not the markers of successful policy.
I am receiving an increasing number of emails and texts from small business people I do business with or have invested in, expressing fear that they will…
— Bill Ackman (@BillAckman) April 9, 2025
Mark Newton, Fundstrat’s global head of technical strategy, emphasized the urgency of diplomatic resolutions, saying, “We need to see some evidence of some negotiation very, very quickly to stop the market’s free fall.”
Currently, the Fed isn’t expected to rescue the market immediately.
Fed Chair Jerome Powell remarked it was “too soon to say what the appropriate monetary policy response will be to these new policies.”
Renaissance Macro’s Dutta describes the anticipated recovery as a slow “slog” rather than the “v-shape” recovery seen in 2020.
Warren Buffett's Berkshire Hathaway is outperforming the S&P 500 by almost 23% year-to-date 🚨 All hail King Buffett 👑🫡 pic.twitter.com/a60nVGxDgA
— Barchart (@Barchart) April 8, 2025
With the S&P 500 experiencing a 15% drawdown, Dutta cautions that equities could remain stagnant for several months, noting, “It’s going to take a while to get back to new highs.
So there’s been a lot of damage that’s already been done.”
About half of Wall Street strategists now foresee the S&P 500 either ending flat or lower for the full year of 2025. Interactive Brokers chief strategist Steve Sosnick suggests that we are in a more normal monetary environment where fundamentals such as earnings, cash flows, and debt servicing are critical. Warren Buffett, the billionaire chairman and CEO of Berkshire Hathaway, has made another predictive move, reinforcing his reputation for financial foresight.
62% of investors are now bearish on the stock market, the most since the Global Financial Crisis 🚨 pic.twitter.com/APCS2GtLEn
— Barchart (@Barchart) April 7, 2025
Buffett’s cautious positioning amid market instability
Over the past two years, Buffett’s company has been strategically stockpiling cash and selling off stocks, keeping Berkshire in strong financial shape even as the market faces turmoil from President Donald Trump’s tariffs.
In 2024, Berkshire sold $134 billion in equities and, by the end of the year, held a record $334 billion in cash, Treasury bills, and other liquid assets.
One significant action by Berkshire was reducing its stake in Apple by about two-thirds, as Apple stock has fallen 23% since its peak last summer and 31% from its post-election high, mainly due to tariff impacts affecting China. Buffett has famously said, “When the tide goes out, you see who’s been swimming naked,” and “Predicting rain doesn’t count. Building arks does.” He has accurately predicted the market several times, including the dot-com bubble, the subprime mortgage crisis, and the COVID-19 pandemic.
👉🏻Warren Buffett’s net worth has grown in 2025 despite Trump tariffs, market sell-off https://t.co/jJIH3TT8BO
— Laura Blanco (@78laurablanco) April 8, 2025
Despite rumors circulating on social media, Buffett has not endorsed Trump’s tariffs. In a recent interview, he stated, “Over time, they are a tax on goods. I mean, the tooth fairy doesn’t pay ’em!” He warned that tariffs could aggravate inflation and potentially lead to a trade war, which would be “bad for the whole world.
If a bear market emerges due to investors bracing for a trade war that could slow down the global economy, it wouldn’t be the first time Buffett has navigated a worldwide recession.
In 2008, amidst the global financial crisis, Buffett wrote, “The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter, and headlines will continue to be scary.”
