(NEW YORK) — U.S. stocks closed down slightly on Tuesday as investors weathered ongoing uncertainty about President Donald Trump’s tariff plans.
The Dow Jones Industrial Average ticked down 156 points, or 0.3%, at the close of trading. The S&P 500 fell 0.1%, while the tech-heavy Nasdaq declined 0.05%.
The U.S. has received about 15 proposals for trade agreements, White House Press Secretary Karoline Leavitt told reporters on Tuesday. Trump issued a 90-day pause of so-called “reciprocal tariffs” last week, saying he plans to negotiate trade agreements with roughly 75 countries targeted by the levies.
The remarks from Leavitt came a day after Trump signaled a willingness to ease auto tariffs, while saying he plans to impose new tariffs on computer chips and pharmaceuticals
Trump’s administration said on Friday that many consumer electronics would be exempt from his wide-ranging reciprocal tariffs, an announcement that sent global markets higher on Monday.
Trump on Monday also indicated a willingness to further ease tariffs, saying he is looking to “help some of the car companies” in the aftermath of 25% auto levies.
The White House also took steps on Monday that may result in new tariffs on pharmaceuticals and semiconductors, posting notices online about national security investigations into those products.
Markets in Europe also traded higher midday on Tuesday, after European Commission President Ursula von der Leyen’s 90-day pause on planned tariff countermeasures went into effect.
Germany’s DAX climbed about 1.21% midday and Britain’s FTSE 100 traded up about 0.90% midday.
South Korea’s KOSPI index closed up 0.88% on Tuesday, posting its second day of gains. And Tokyo’s Nikkei 225 climbed 0.84%.
Markets in China, where Trump’s reciprocal tariffs are still in place, showed less enthusiasm. Shanghai’s Composite Index rose just 0.15% and Hong Kong’s Hang Seng Index climbed 0.23%.
ABC News’ David Brennan contributed to this report.
(NEW YORK) — U.S. stocks were little changed in early trading on Tuesday, a day after President Donald Trump signaled a willingness to ease some tariffs but also impose new ones.
The Dow Jones Industrial Average ticked up 52 points, or 0.1%. The S&P 500 climbed 0.2%, while the tech-heavy Nasdaq increased 0.05%.
Trump’s administration said on Friday that many consumer electronics would be exempt from his wide-ranging reciprocal tariffs, an announcement that sent global markets higher on Monday.
Trump on Monday also signaled a willingness to further ease tariffs, saying he is looking to “help some of the car companies” in the aftermath of 25% auto levies.
The White House also took steps on Monday that may result in new tariffs on pharmaceuticals and semiconductors, posting notices online about national security investigations into those products.
Markets in Europe also traded higher midday on Tuesday, after European Commission President Ursula von der Leyen’s 90-day pause on planned tariff countermeasures went into effect.
Germany’s DAX climbed about 1.21% midday and Britain’s FTSE 100 traded up about 0.90% midday.
South Korea’s KOSPI index closed up 0.88% on Tuesday, posting its second day of gains. And Tokyo’s Nikkei 225 climbed 0.84%.
Markets in China, where Trump’s reciprocal tariffs are still in place, showed less enthusiasm. Shanghai’s Composite Index rose just 0.15% and Hong Kong’s Hang Seng Index climbed 0.23%.
ABC News’ David Brennan contributed to this report.
(WASHINGTON) — Lawyers for Meta told a federal judge on Monday that the social media company founded by billionaire Mark Zuckerberg is not a monopoly, countering a landmark lawsuit brought against it by the Federal Trade Commission accusing the tech giant of gobbling up its competitors to corner the market.
“Meta has no Monopoly,” Mark Hansen, an attorney for the company argued in U.S. District Court in Washington, D.C., as the trial got underway.
The case marks the first significant opportunity for President Donald Trump’s administration to follow through on the president’s campaign promise to take on Big Tech.
In court filings, the FTC argued that Meta purposefully and illegally undercut smaller rivals to “neutralize perceived competitive threats.”
The FTC lawsuit, originally filed in 2020 when Meta went by Facebook, alleges that the company bought Instagram and WhatsApp to establish an illegal monopoly.
“Unable to maintain its monopoly by fairly competing, the company’s executives addressed the existential threat by buying up new innovators that were succeeding where Facebook failed,” the FTC’s attorneys wrote in the court documents.
FTC lawyers called Zuckerberg as their first witness on Monday. Zuckerberg faced questions about his company’s inner workings and how it has evolved in recent years to respond to competition from other social media platforms.
If Meta loses, the lawsuit could force a dismantling of the company by forcing it to break off the two apps, Instagram and WhatsApp, it purchased over a decade ago.
Meta’s legal team argued in court that the case centers on broader “industry issues” — not just issues concerning Meta. They claimed that many of Meta’s innovations and acquisitions were in response to moves by “peer” tech companies.
During Monday’s court proceedings, Meta’s lawyers said the company has been “pro-competitive,” arguing the government “doesn’t want to talk about” TikTok, a rival that they contend “rocked the world,” and sent Meta into “a crisis.”
In opening statements, Meta’s lawyers claimed that “consumer welfare” is not the central issue in the case.
The company said it had to adapt after TikTok’s explosive growth during the pandemic.
“Meta didn’t even have a short-form video feature” when TikTok was launched in 2016 by the Chinese technology company ByteDance, Meta’s lawyers argued.
Meta’s legal team added that many creators were initially skeptical of Instagram Reels, a product launched in response to TikTok, because short-form videos tended to monetize significantly less than longer traditional videos.
The social media company’s lawyers pointed to other platforms adapting short-form videos like YouTube shorts, Snapchat, X (formerly known as Twitter) and LinkedIn as examples of similar responses to TikTok’s success. Meta, they said, had to “move with the times or end up like MySpace,” the now-defunct social media site that dominated the industry two decades ago.
Meta’s lawyers also cited a 2021 Meta outage, during which users turned to other platforms. TikTok saw an 11% increase in users and YouTube gained 8%, Meta’s lawyers argued, presenting the figures as proof that competitors have substantial influence. They added that Meta accounts for less than 20% of total time spent on social media platforms.
Much of Zuckerberg’s early testimony Monday focused on the Facebook News Feed and how users interact with friends, something he said has shifted as people moved from desktop computers to mobile devices.
He acknowledged that the emphasis on friendship had declined as users began to share content differently. He noted that by 2018, there was growing discourse over whether time spent on social media was beneficial.
“The friend part has gone down quite a bit, it’s still something we care about,” Zuckerberg testified. However, he added that friendship is now “one part of what we do.”
Later Monday, the FTC lawyers questioned Zuckerberg about his company’s acquisition of Instagram. The deal occurred after Facebook’s own camera app, Snap, failed to compete, the government’s lawyers noted.
In emails from February 2012 read in court by the FTC lawyers, Zuckerburg wrote, “Snap might be a good first step but we’d be very behind in both functionality and brand core use cases of Facebook will develop in the mobile world, which is really scary and we might want to consider paying a lot of money for this.”
When questioned about the 2012 Instagram purchase, Zuckerberg said his company had just gone public and had the capital. He characterized the email as an example of his desire to do a build-versus-buy analysis.
When asked about his “scary” remark, Zuckerberg testified that he “read this as trying to analyze, I think, where the value is with Instagram.”
“Some of the stuff is simply hypothetical, that this could potentially be scary. I’m not sure if I read this as I was really scared at the time,” Zuckerberg said.
Zuckerberg said that when he wrote the email, he was thinking about whether it was the best approach to buy Instagram.
“By this point, I was leaning toward we should buy them if we could,” he testified.
Shortly after the conversation in February 2012, Meta bought Instagram in April for $1 billion.
In a statement released on Monday, Meta said, “The evidence at trial will show what every 17-year-old in the world knows: Instagram, Facebook and WhatsApp compete with Chinese-owned TikTok, YouTube, X, iMessage and many others.”
The company added, “More than 10 years after the FTC reviewed and cleared our acquisitions, the Commission’s action in this case sends the message that no deal is ever truly final. Regulators should be supporting American innovation, rather than seeking to break up a great American company and further advantaging China on critical issues like AI.”
Zuckerberg is expected to return to the witness stand on Tuesday.
(NEW YORK) — U.S. stocks opened muted on Tuesday, a day after President Donald Trump signaled a willingness to ease some tariffs but also impose new ones.
The Dow Jones Industrial Average ticked up 71 points, or 0.1%. The S&P 500 climbed 0.1%, while the tech-heavy Nasdaq increased 0.05%.
Trump’s administration said on Friday that many consumer electronics would be exempt from his wide-ranging reciprocal tariffs, an announcement that sent global markets higher on Monday.
Trump on Monday also signaled a willingness to further ease tariffs, saying he is looking to “help some of the car companies” in the aftermath of 25% auto levies.
The White House also took steps on Monday that may result in new tariffs on pharmaceuticals and semiconductors, posting notices online about national security investigations into those products.
Markets in Europe also traded higher midday on Tuesday, after European Commission President Ursula von der Leyen’s 90-day pause on planned tariff countermeasures went into effect.
Germany’s DAX climbed about 1.21% midday and Britain’s FTSE 100 traded up about 0.90% midday.
South Korea’s KOSPI index closed up 0.88% on Tuesday, posting its second day of gains. And Tokyo’s Nikkei 225 climbed 0.84%.
Markets in China, where Trump’s reciprocal tariffs are still in place, showed less enthusiasm. Shanghai’s Composite Index rose just 0.15% and Hong Kong’s Hang Seng Index climbed 0.23%.
ABC News’ David Brennan contributed to this report.
(NEW YORK) — Major stock markets in Asia and Europe rose in Monday trading following the U.S. announcement that key consumer electronics would be temporarily exempted from President Donald Trump’s reciprocal tariffs.
Hong Kong’s Hang Seng index led the regional gains, closing 2.4% up with the Hang Seng Tech Index up more than 2%.
On the mainland, Shanghai’s Composite Index rose 0.76% and Shenzen’s Component Index rose 0.51%.
In Japan, the Nikkei 225 in Tokyo rose 1.18% while the broader Topix index rose nearly 0.9%.
Elsewhere, South Korea’s Kospi index grew 0.95% and Australia’s S&P/ASX 200 closed 1.34% higher. Taiwan’s Taeix index slipped by 0.08%.
Tech stocks performed particularly well. Tokyo Electron grew 2%, Advantest — a testing equipment maker — rose 5.4% and South Korea’s Samsung Electronics gained 1.4%.
In Europe, the pan-continental STOXX 600 rose 1.8% on opening. Germany’s DAX index rose more than 2%, France’s CAC 40 rose 1.9% and Britain’s FTSE 100 rose 1.95%.
U.S. futures were also trending up. Dow Jones futures were up 0.71% as of Monday morning, S&P 500 futures were up 1.19% and Nasdaq futures up 1.57%.
Smartphones, computers, flat panel TV displays, memory chips, semiconductor-based storage devices and other electronics are among the items excluded from the Trump administration’s reciprocal tariffs, according to a bulletin from the U.S. Customs and Border Protection published Friday night.
The news suggested possible relief for tech companies concerned by Trump’s 145% tariffs on all goods from China. But the president and his economic advisers stressed over the weekend that any reprieve would be temporary, with specific tariffs to be imposed on goods put under a new national security classification.
Trump posted to Truth Social on Sunday saying there was “was no Tariff ‘exemption’ announced on Friday” and that semiconductor tariffs will “just be moving to a different Tariff ‘bucket.'”
“NOBODY is getting ‘off the hook’ for the unfair Trade Balances, and Non Monetary Tariff Barriers, that other Countries have used against us, especially not China which, by far, treats us the worst!” Trump wrote.
“We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations,” Trump added.
Trump did not push back Saturday night when a reporter asked for details on “exemptions.”
“I’ll give you that answer on Monday. We’ll be very specific on Monday,” Trump said. “We’re taking in a lot of money. As a country, we’re taking in a lot of money.”
ABC News’ Selina Wang, Fritz Farrow and Joe Simonetti contributed to this report.
(NEW YORK) — U.S. stocks climbed on Friday, shrugging off new Chinese tariffs on American goods that intensified a trade war between the two largest economies in the world.
The Dow Jones Industrial Average jumped 440 points, or 1.1%, while the S&P 500 surged 1.4%. The tech-heavy Nasdaq increased 1.6%.
Meanwhile, a selloff of 10-year Treasuries sent yields climbing to 4.46%. That figure neared a recent high attained hours before President Donald Trump announced on Wednesday a 90-day delay of so-called “reciprocal tariffs” for most U.S. trade partners.
A University of Michigan survey of shopper sentiment on Friday showed consumer attitudes fell more than expected in April, dropping to a level lower than any recorded during the Great Recession.
The market turmoil Friday morning came after China issued a 125% U.S. tariff, though Beijing said it would not increase tariffs further. The move came in response to a 145% tariff on Chinese goods announced by Trump earlier this week.
Larry Fink, the CEO of financial firm BlackRock, which manages about $11.5 trillion in assets, warned that the U.S. economy is poised for a downturn.
“I think we’re very close, if not in, a recession now,” Fink told CNBC.
In a social media post on Friday, Trump signaled confidence.
“We are doing really well on our TARIFF POLICY. Very exciting for America, and the World!!! It is moving along quickly,” Trump said on Truth Social.
U.S. markets closed Thursday with notable losses, a reversal from the enthusiasm unleashed by Trump’s Wednesday decision to pause some tariffs.
Several Asian stock markets slid back into the red on Friday morning, reversing gains made on Thursday amid continued uncertainty as to whether nations would be able to secure deals with Trump to avoid long-term tariffs — and as China announced new retaliatory tariffs on American goods.
Tokyo’s Nikkei 225 index slipped 3.8% and Japan’s broader TOPIX index fell 3.5%. In South Korea, the KOSPI dropped nearly 1% and Australia’s S&P/ASX 200 dipped 0.95%.
In China, markets fluctuated as investors responded to the White House clarifying that the level of tariffs on Chinese goods is now 145% — not 125% as previously believed.
Hong Kong’s Hang Seng index rose 2%, Shanghai’s Composite Index rose 0.6% and Shenzen’s Component Index rose 1.2%, with investors buoyed by Beijing’s announcement of stimulus measures to bolster the economy against the escalating American tariffs.
Other prominent Asia indices in the green on Friday included Taiwan’s Taiex index up 2.7% and India’s NIFTY 50 up 1.9%.
European markets appeared hesitant upon opening and slipped after China announced it would increase tariffs on U.S. goods from 84% to 125% from Saturday.
On Thursday, Trump again hinted at the resumption of his sweeping tariffs.
“If we can’t make the deal we want to make or we have to make or that’s, you know, good for both parties — it’s got to be good for both parties — then we go back to where we were,” Trump said.
When asked if he would extend the 90-day pause, the president responded, “We’ll have to see what happens at the time.”
Marcus Wells, a barista at Float Coffee in Hollywood, Calif., speaks, April 8, 2025, about the impact the global tariff war will have on his business. KABC
(NEW YORK) — Americans’ love affair with coffee and chocolate could soon get a lot more expensive.
Baristas and confectioners say the beans they need to make their products are mostly grown in countries targeted by the Trump administration’s tariffs.
According to the U.S. Department of Agriculture, the United States is the world’s second-largest importer of coffee. In a reflection of how much Americans love chocolate, U.S. businesses import about $5 billion worth of cocoa beans a year, according to the USDA.
Some owners of small businesses dealing in coffee and confections say they fear the tariffs imposed by President Donald Trump will leave them with no choice but to pass the added costs on to their customers.
“So while the tariffs are being imposed to try to up the production of goods in the United States, that’s a good we just simply cannot make in the United States,” Marcus Wells, a barista at Float Coffee in Hollywood, California, told ABC Los Angeles Station KABC of the coffee beans he imports from Central and South American countries that are currently are under a 10% baseline tariff imposed by the Trump administration.
Trump announced on Wednesday that he was pausing reciprocal tariffs on most countries for 90 days, except China.
Wells said the baseline tariff of 10% will likely translate to a 10% increase in a cup of coffee at his shop.
“We’re always looking for ways to maintain customers and it’s hard to do that when you’re constantly having to raise prices in order to keep your business open,” Wells said.
Cason Crane, CEO of Explorer Cold Brew, a company that sells bottled and canned coffee at stores across the nation, told ABC News that he hopes the 90-day pause will allow enough time for countries to negotiate deals with the White House to stave off the higher reciprocal tariffs.
“Coffee has actually been exempt from tariffs in the United States since the 1800s. So, my hope is that, with this 90-day pause, while it’s not ideal to still have 10% tariffs, that the administration can negotiate some more targeted deals that recognize things like the United States cannot grow coffee outside of Hawaii or Puerto Rico, which account for half a percent of worldwide coffee production,” Crane said.
Before Trump put a pause on reciprocal tariffs on Wednesday, Bill Ackman, the billionaire CEO of the hedge fund Pershing Square Capital Management and a supporter of Trump, posted a lengthy message on social media, saying, “If the president doesn’t pause the effects of the tariffs soon, many small businesses will go bankrupt.”
In his post, Ackman shared an email he received from Crane, whose company he has invested in. In the email, Crane said the price of glass bottles he sources from China for his coffee will go up 50%, while chai sourced from India will increase by 26% and coffee imported from Ethiopia, Peru and Canada will climb by 10%.
“Will my clients tolerate a near doubling of their contract costs overnight, or will they expect me to absorb the increases my vendors are already threatening?” Crane wrote in the email. “If clients resist price hikes and my employees demand higher wages to offset their rising cost of living, we end up in a lose-lose scenario — no spending and no jobs.”
On Thursday, Crane told ABC News that he likely won’t be able to raise prices.
“Small businesses have way fewer options than big businesses. We don’t really have the capability to raise our prices,” Crane said. “Think about going to a farmers market; you’re already paying a little bit more. So, we’re already priced at the top range and we don’t really have the power to negotiate with our suppliers like the big businesses do. So the best I can do is keep holding on and hope for a better policy, and urge people to look out for those small businesses.”
New Hampshire chocolatier Richard Tango-Lowy, owner of Dancing Lion Chocolate in Manchester, said he imports some of his cocoa beans from Vietnam, which Trump says faces a 46% reciprocal tariff if it doesn’t bargain with the White House. Tango-Lowy said he also gets beans from Bolivia, which is subject to the baseline 10% tariff.
“We have about 600 kilos of beans on the way from Bolivia. We have no idea what they will cost right now,” Tango-Lowy told ABC affiliate station WMUR in Manchester.
Tango-Lowy said much of his packaging comes from Hong Kong, which is subject to China’s tariffs.
“We work domestically where we can, but a lot of what we do is not available domestically,” Tango-Lowy said. “It just doesn’t exist.”
Tango-Lowy is bracing to have to absorb the tariffs, saying, “We’re going to need the beans at some point.”
As food and beverage companies contemplate if they will or can’t cover the tariffs without raising prices on customers, Andrew Sinclair, owner of Mad Lab Coffee in Los Angeles, said his prices will stay the same.
“If you had to pay $9 for a cup of coffee I probably wouldn’t see you every day, and I like seeing people every day,” Sinclair told KABC. “So we’re going to keep our prices the same.”
Sinclair said he trusts his longstanding partnerships with growers in Colombia and Ethiopia will help him weather the economic turmoil.
“If you can afford a good cup of coffee, go to your local coffee shop and grab a good cup of coffee,” Sinclair said. “And if you can’t afford it, please don’t buy a cup of coffee and end up not being able to pay your rent. That’s just not responsible.”
(NEW YORK) — U.S. stocks seesawed between gains and losses in early trading on Friday as new Chinese tariffs on American goods intensified a trade war between the two largest economies in the world.
The Dow Jones Industrial Average dropped 103 points, or 0.25%, while the S&P 500 fell 0.2%. The tech-heavy Nasdaq declined 0.07%.
Meanwhile, a selloff of 10-year Treasuries sent yields climbing to 4.55%. That figure exceeded a recent high attained hours before President Donald Trump announced on Wednesday a 90-day delay of so-called “reciprocal tariffs” for most U.S. trade partners.
The market turmoil Friday morning came after China issued a 125% U.S. tariff, though Beijing said it would not increase tariffs further. The move came in response to a 145% tariff on Chinese goods announced by Trump earlier this week.
In a social media post, Trump signaled confidence.
“We are doing really well on our TARIFF POLICY. Very exciting for America, and the World!!! It is moving along quickly,” Trump said on Truth Social.
U.S. markets closed Thursday with notable losses, a reversal from the enthusiasm unleashed by Trump’s Wednesday decision to pause some tariffs.
Several Asian stock markets slid back into the red on Friday morning, reversing gains made on Thursday amid continued uncertainty as to whether nations would be able to secure deals with Trump to avoid long-term tariffs — and as China announced new retaliatory tariffs on American goods.
Tokyo’s Nikkei 225 index slipped 3.8% and Japan’s broader TOPIX index fell 3.5%. In South Korea, the KOSPI dropped nearly 1% and Australia’s S&P/ASX 200 dipped 0.95%.
In China, markets fluctuated as investors responded to the White House clarifying that the level of tariffs on Chinese goods is now 145% — not 125% as previously believed.
Hong Kong’s Hang Seng index rose 2%, Shanghai’s Composite Index rose 0.6% and Shenzen’s Component Index rose 1.2%, with investors buoyed by Beijing’s announcement of stimulus measures to bolster the economy against the escalating American tariffs.
Other prominent Asia indices in the green on Friday included Taiwan’s Taiex index up 2.7% and India’s NIFTY 50 up 1.9%.
European markets appeared hesitant upon opening and slipped after China announced it would increase tariffs on U.S. goods from 84% to 125% from Saturday.
On Thursday, Trump again hinted at the resumption of his sweeping tariffs.
“If we can’t make the deal we want to make or we have to make or that’s, you know, good for both parties — it’s got to be good for both parties — then we go back to where we were,” Trump said.
When asked if he would extend the 90-day pause, the president responded, “We’ll have to see what happens at the time.”
(WASHINGTON) — President Donald Trump’s decision to pause so-called “reciprocal tariffs” for most countries triggered a historic stock market rally on Wednesday, but the levies that remain in place are still expected to hike prices and put the U.S. at risk of a recession, experts told ABC News.
Alongside the suspension of some tariffs, Trump increased duties on Chinese goods to a total of 145%, marking a significant escalation of a trade war between the two largest economies in the world.
Stock markets plunged on Thursday as investors digested Trump’s tariff announcement, slashing roughly half of the previous day’s rally.
The high tariffs on China, the third-largest U.S. trade partner, are expected to raise prices for an array of widely used products, including smartphones, shoes, clothes and video game systems, experts said.
Plus, experts added, the extra costs for U.S. shoppers and a general sense of policy uncertainty increases the likelihood of an economic downturn.
“China is not the only country we trade with but they are an important trading partner for a lot of goods,” Christopher Conlon, a professor of economics at New York University who studies trade, told ABC News.
Even after Trump paused some tariffs, U.S. consumers face an average effective tariff rate of 25.2%, the highest since 1909, the Yale Budget Lab found in report on Thursday. An effective tariff rate factors in the impact of tariffs on imports of finished goods as well as inputs used by domestic firms.
In addition to the tariffs on Chinese goods, the White House kept in place an across-the-board tariff of 10% on nearly all imports. The U.S. also continues to impose 25% levies on foreign autos, aluminum and steel.
Goods from Mexico and Canada face tariffs of 25%, though the measure excludes products covered under the United States-Mexico-Canada Agreement, or USMCA.
Current tariffs are expected to hike prices by an additional 2.7% in 2025, costing consumers on average about $4,400 per household over that time, the Yale Budget Lab said.
“Higher tariffs will push prices up significantly over the next year or so,” Preston Caldwell, chief U.S. economist at Morningstar, told ABC News in a statement on Thursday.
On Thursday, the White House said U.S. tariffs on China stand at 145%, more than the 125% levy that had been widely reported a day earlier.
At the previous tariff level of 125% for Chinese goods, the cost of a nearly $60 car seat would’ve increased an average of $132.75 for a new price of about $192, according to the left-leaning Center for American Progress, or CAP. A Playstation 5 video game system, meanwhile, would’ve increased $623.75 for a new price of roughly $1,122, CAP found.
Under the current 145% tariffs, those price increases would rise further.
Smartphone prices are also expected to rise, experts said. China accounted for more than four of every five of smartphones imported into the U.S. last year, S&P Global said in a note to clients on Thursday.
Experts told ABC News they anticipate price hikes will coincide with an elevated risk of a recession.
They pointed to risks of a slowdown for businesses mired in higher tax costs, as well as a shopping slump as consumers curtail spending to pad their savings to help weather price increases and a possible economic downturn.
“It was encouraging to see the President reverse himself on the so-called “reciprocal” tariffs yesterday, but I wouldn’t take much solace in it as the global trade war continues to rage,” Mark Zandi, chief economist at Moody’s Analytics, said in a post on X. “I still put the odds of a recession this year at 60%.”
The view echoed a note J.P.Morgan sent to clients hours after Trump’s tariff pause on Wednesday.
“The drag from trade policy is likely to be somewhat less than before, and thus the prospect of a recession is a closer call,” J.P.Morgan said. “However, we still think a contraction in real activity later this year is more likely than not.”
For now, the economy remains in solid shape by several key measures.
The unemployment rate stands at a historically low level. Meanwhile, inflation cooled in March, putting price increases well below a peak attained in 2022, fresh data on Thursday showed.
Meanwhile, hiring surged in March, blowing past economists’ expectations and accelerating job growth from the previous month.
Conlon, of New York University, said the likelihood of a recession eased after Trump’s tariff pause but the risk of a downturn remains elevated.
“A lot of the permanent disruption and damage has been done, mostly because you’ll see consumers and companies react to this uncertainty by pulling back,” Conlon said. “People will be way less likely to go out and make big-ticket purchases because of recession fears and that can be self-perpetuating.”
(NEW YORK) — Consumer prices rose 2.4% in March compared to a year ago, marking a cooldown during a period that preceded the recession warnings and market turmoil following President Donald Trump’s recent escalation of tariffs. The reading came in lower than economists expected.
Even as overall cost hikes slowed, egg prices soared 60% higher than a year prior. Bird flu has decimated the egg supply, lifting prices higher.
The cooldown is owed in part to a drop in energy prices, as gasoline prices fell about 6% from the previous month, U.S. Bureau of Labor Statistics data showed. Food prices rose 0.4% compared to the previous month, however, putting upward pressure on the cost of living.
Core inflation — a closely watched measure that strips out volatile food and energy prices — increased 2.8% over the year ending in March, which registered the lowest one-year gain in that index since March 2021, data showed.
The fresh data arrives a day after a day after Trump paused some tariffs and U.S. stocks rallied.
In February, year-over-year inflation rose 2.8% compared to a year prior.
Trump last week issued 10% tariffs on imports from nearly all countries, as well as so-called “reciprocal tariffs” targeting about 75 nations — but Trump announced a 90-day pause of those reciprocal tariffs on Wednesday.
Alongside the pause of some tariffs, Trump announced additional tariffs on China, increasing the cumulative duties on Chinese goods from 104% to 125%. The escalation came in response to a fresh round of tariffs from China that raised levies on U.S. goods to 84%.
Economists widely expect the tariffs that remain in place to increase prices for some consumer goods, though the exact timing and extent of the price hikes remain unclear.
Last month, Federal Reserve Chair Jerome Powell said Trump’s tariffs were partly to blame for price increases that had taken place in February.
Despite escalating trade tensions and market turbulence since Trump took office in January, the economy remains in solid shape by several key measures.
The unemployment rate stands at a historically low level. Meanwhile, inflation sits well below a peak attained in 2022, though price increases register nearly a percentage point higher than the Fed’s goal of 2%.
Hiring surged in March, blowing past economists’ expectations and accelerating job growth from the previous month, government data last week showed.
Key indicators “still show a solid economy,” Powell said on Friday.
However, tariffs threaten to derail hiring and worsen inflation, multiple analysts previously told ABC News, before Trump paused “reciprocal tariffs” for 90 days.
Far-reaching levies increase the likelihood of a recession by driving up prices, sapping consumer spending, slowing business activity and risking layoffs, they said.
