Part 5/9:
The market's reaction to these tariffs has been alarming. According to Goldman Sachs, the likelihood of a recession occurring has increased significantly—from a 20% chance a month ago to over 60% now, due to the tariffs' potential impact. As a result, the S&P 500—a weighted index of American companies—has seen a stark decline of about 20% from its peak, reflecting investor fears about future economic stability.
While the stock market may not fully represent the economy, it greatly influences spending patterns, especially among the wealthiest Americans, who account for half of all consumer spending. Thus, fluctuations in the stock market can have ripple effects throughout the economy.