The atmosphere on Wall Street took a hit last week as concerns over a potential recession were sparked by President Trump's aggressive implementation of tariffs, causing market volatility. The Nasdaq closed the week in bear market territory, and the Dow and S&P 500 also faced corrections, marking their poorest five-day performance since 2020.

Despite the market turmoil, strategist Ed Yardeni of Yardeni Research advised against quick reactions, emphasizing that it is not the time to panic. He mentioned that the true impact of the tariffs is yet to be fully realized and could take several months. Yardeni highlighted that factors such as negotiations and retaliatory actions from other countries will influence market direction, urging investors to seek more clarity.

Following Beijing's response on Friday with increased tariffs on US goods, the market experienced further decline. Yardeni emphasized that uncertainty persists regarding the outcomes of these tariff policies.

Investors appeared to have underestimated the extent of Trump's tariff initiatives, which were originally proposed during his 2024 presidential campaign. The execution of these tariffs has led to market uncertainty and a lack of confidence, with economist Joe Brusuelas pointing out flaws in the administration's approach.