Jim Cramer is throwing red flags all over Wall Street.
After stocks got slammed two days in a row thanks to President Trump’s new tariffs, the CNBC host said the next earnings week could give the first real signs of how bad things are. According to Jim, what happens next won’t be up to companies—it’ll be up to Trump.
“The direction of the market depends on what Trump does next,” Jim said on Friday night. He pointed back to the 1987 crash, saying things could spiral again if Trump doesn’t change course. “If President Trump stays intransigent and does nothing to ameliorate the damage that I saw these last few days, I’m not going to be constructive here.”
Stock heat map. Source: TradingView
Then, on Saturday morning, Cramer jumped on X to say: “It’s tough to build a new, weaker, world order on the fly. Frantically trying to do it but don’t see anything yet that takes the October 87 scenario off the table yet. Those who bottom-fished are sleeping with the fishes …so far.”
Markets react fast to tariff chaos
The S&P 500 gave up nearly 10% in two days, ending 17.4% below its February high. That drop puts it in a rare group with Black Monday 1987, the post-Lehman crash of 2008, and the Covid panic in 2020.
Before the collapse, markets were trying to find a floor. The March rally off a 10% correction looked like it might hold. Then it broke. Traders kept trying to find support levels—around 5,100 on Friday—but every bounce failed. That day alone saw a 6% fall straight into the close.
See also
Meta, Amazon hit hard by Trump’s tariffs as tech stocks plunge
For two years, the stock market priced in a recession that never came. Then it got one slapped in its face in just two days, all thanks to Trump’s broadside on trading partners. The result was one of the ugliest back-to-back crashes in history.
Markets are now stuck between two bad outcomes. A short-term bounce could happen. But deeper damage is already locked in. Bespoke Investment Group described the situation plain and simple: “The stock market is rudderless.”
Even Friday’s job report showed no sign of economic collapse, but no one cared. As Bespoke put it, “The only thing that matters at this point rests on the decision of one man’s Truth Social account.”
Jim Paulsen from Paulsen Perspectives had a different worry. He called out the math behind the tariff rates as twisted. “The stupidity of what we’re doing becomes more obvious,” he said. “A massive tax increase on the entire global economy at this point doesn’t make much sense. And I think it doesn’t make much sense for the Fed to stubbornly not want to ease.”
Fed Chair Jerome Powell made things worse. He repeated on Friday that he’s in “no hurry” to cut rates. He said inflation expectations remain high. The market took that as a clear message: The Fed won’t step in unless things get even worse.
See also
Asia-Pacific markets open slightly higher ahead of Trump’s expected tariff rollout
Traders ditch gold, utilities and mega-caps
Friday was also about panic setting in. Some of the usual safe bets got wrecked too. Gold fell over 2%. Utilities tanked 5.5%. Even Berkshire Hathaway lost almost 7%. Big names like Visa, Eli Lilly, and JPMorgan all lagged behind the S&P 500.
Meanwhile, the beaten-down Russell 2000 actually outperformed by 1.6%. That’s not good news—it just means the big players were getting dumped harder.
But we’d like to also point to a few forces that could slow the bleeding. The 10-year Treasury yield dropped from 4.8% in January to 4%. The dollar is falling. Oil sank to $60 a barrel. Those things might act like a quiet stimulus in the background.
Still, everything now hinges on one thing: whether Trump holds the line on tariffs or backs off. If nothing changes, recession fears will only grow. If there’s relief, the market could breathe—for a minute.
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