Paul Tudor Jones Warns: New Lows May Be Ahead for U.S. Stocks

May 6 – Billionaire hedge fund manager and legendary investor Paul Tudor Jones is sounding the alarm: despite recent market rebounds, he believes U.S. stocks may soon hit fresh lows.

In a recent interview, Jones pointed to continued pressure from trade tensions and high interest rates as key threats to the market. “It’s clear to me—Trump is boxed in by tariffs, and the Fed isn’t cutting rates. That’s bearish for stocks,” he said.

While equity markets have recovered much of the ground lost during April’s steep selloff, Jones believes the stressors haven’t gone away. He argued that unless there’s a sharp correction, neither tariffs nor rates are likely to ease.

The S&P 500 has bounced back but remains about 8% below its record highs. Jones suggested the index could fall to around 4,980, about 11% below current levels.

Adding to concerns, Jones noted that although Trump has signaled potential tariff reductions in negotiations with China, any reduction—from the current peak levels of 145%—would still function as a major tax on U.S. consumers. He warned this could shave 2–3% off U.S. GDP, making it one of the largest de facto tax increases since the 1960s.

Meanwhile, the Federal Reserve is holding firm. Markets expect no rate change at this week’s meeting, and Jones believes unless the Fed turns clearly dovish, stocks may need to fall further before meaningful policy support appears.

Other strategists are growing cautious as well:

• Wells Fargo said it wouldn’t be surprised to see the S&P 500 retest recent lows due to ongoing trade policy stress.
• HSBC maintained a “tactically cautious” stance on risk assets, warning that recent strong economic data could soon deteriorate due to lagging effects.

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