President Donald Trump’s tariff plans have been delivering plenty of shock and awe across global markets. Closer to home, the Dow industrials dropped more than 1,500 point, the S&P 500 fell more than 4%, and Nasdaq sank 5.6%.

Some calm voices have been trying to prevail:

But that’s a tall order against the backdrop of what some have calculated are the biggest tariffs in 100 years. Apart from how China and other countries will react, the threat of inflation and recession for U.S. investors is at the heart of the angst for markets.

Our call of the day comes from Charles Schwab’s chief investment strategist Liz Ann Sonders, who offers up a post-tariff-turmoil playbook for rattled investors.

The extreme market reaction so far is “justified because there are still a lot of open-ended questions” surrounding, for example, potential hefty tariff hikes on China and Vietnam, Sonders told Bloomberg TV late Wednesday.

“I think what we’re likely to see fairly soon is maybe a rerating of the probabilities of recession,” she said. And given some of that has been happening in the last couple of weeks — Goldman hiked its recession view earlier this week — there may be more on that front, she said.

Investors also need to consider chances of an earnings recession, as companies struggle to pass on higher input costs, said Sonders. “I think at the very least we are going to see continued downward pressure on 2025 estimates.”

“We’re already in week 15, in terms of consecutive weeks where earnings estimates have been coming down. Given that just a few months ago, when we had expectations of about 14% or 15% earnings growth in 2025 that was predicated on record-breaking profit margins, there’s no way we’re going to maintain record-breaking profit margins.”

Currently standing at around 10%, consensus on 2025 earnings growth, is “too lofty,” with the path of least resistance “significantly down from here,” she cautioned.

Still, with earnings season around the corner, markets will begin to get an inkling of how companies indirectly or directly impacted by tariffs, plan to manage those, whether by passing to consumers or absorbing into profit margins, said Sonders.

So what to buy in this landscape? “What we’ve been suggesting to investors in this backdrop is to be more factor focused, trying to navigate around sector leadership, which has been all over the map,” she said.

Sonders said what’s been an anchor for investors during a tough run for stocks has been sticking to stable companies with high profit margins. So she prefers high-quality stocks, while Schwab has also been encouraging clients to seek non-U.S. diversification plays.

“And I think a year like this so far is a reminder that international equity diversification pays rewards, and it can sometimes happen really, really quickly in the face of what had been a lot of skepticism about ‘Why would I have any money anywhere else other than the United States.'”

While Sonders didn’t manage specific investments, the iShares Edge MSCI USA Quality Factor ETF (QUAL) has slipped 3% this year, while the Vanguard Total International Stock ETF (VXUS) has gained 6%.