Goldman Sachs warns of a tariff surprise: April 2 could bring market shakeup The Trump administration’s approach to tariffs has been one of the biggest unpredictable elements in the market. After recent reports suggested that the administration may be softening its stance, Goldman Sachs economists are sounding the alarm. They’re warning that this more “benign” attitude might just be setting the stage for a bigger shock to the system.
Don’t be fooled by the softer talk. According to Goldman, tariffs have always been a negotiating tool for the Trump administration. The goal is to start with strong positions, then adjust as needed. So when the media reports suggest that tariffs might go easier, that’s just a signal for investors to prepare for the opposite. The real surprise could be an aggressive move come April 2, with Goldman predicting that initial tariffs could be as high as 18%. This could double what the markets are expecting, catching many off guard.
Here’s the kicker. U.S. tariffs have already jumped significantly from a little over 2% to nearly 7% by March. The proposed tariffs shows that number could soar to nearly 11% by the time April hits. Investors who think the coast is clear may be in for a tough lesson as tariffs climb, especially if the broader market’s fragile recovery is hit by this new round of penalties.
Momentum stocks in tech, beware. Investors betting big on high-flying tech stocks may want to take a step back. The surge in momentum tech stocks has been unstoppable lately, but with tariffs on the rise, things could take a turn. The market’s current bullish optimism may be blindsiding investors to the true economic conditions. The warning signs are clear, but many are still chasing those highs. The reality of tariffs will likely deliver a hard blow to the tech-heavy stocks.
Meanwhile, the broader economy is showing cracks. The market is experiencing the lowest volume and volatility since the February market top, which suggests that the broader economy may be quietly imploding. Breadth on the Nasdaq and the NYSE has been negative, showing that the rally isn’t as broad-based as some would like to believe. Even transports, typically a strong indicator of economic health, are leading the downside, a sign that things are not as rosy as they might seem.
Sources:
https://x.com/DeItaone/status/1904511685290832138
https://x.com/AyeshaTariq/status/1904866923004764492
https://x.com/SuburbanDrone/status/1904629175291699664
https://x.com/markoinny/status/1904550128578351326