MW Paul Tudor Jones says U.S. stocks will fall to new lows - even if Trump dramatically dials back China tariffs

By Joseph Adinolfi

"We'll probably go down to new lows even when Trump dials back China to 50%."Paul Tudor Jones

That's Paul Tudor Jones, the billionaire hedge-fund founder, sharing his outlook for the U.S. stock market during an interview with CNBC on Tuesday.

The upshot? U.S. stocks are likely going lower before the end of the year, even if President Donald Trump dials back tariffs on Chinese imports.

"For me, it's pretty clear. You have Trump, who's locked in on tariffs. You have the Fed, who's locked in on not cutting rates. That's not good for the stock market," Jones said.

"We'll probably go down to new lows even when Trump dials back China to 50%."

Trump's decision to unveil tariff plans that would have imposed massive levies on imports from many U.S. allies and adversaries sent U.S. stocks into a tailspin in April, with the S&P 500 SPX falling roughly 19% from its February high, bringing the index right to the edge of bear-market territory.

Stocks have since recovered most of these losses since Trump announced a 90-day pause on some of the most onerous levies, while exempting many made-in-China electronics.

Still, Trump has slapped a 145% tariff on most Chinese-made goods, while China has imposed 125% retaliatory tariffs on U.S. imports, with some exceptions.

During an interview with NBC's "Meet the Press," Trump said he would likely lower tariffs on Chinese goods "at some point."

But even if Trump decided to cut the tariff rate on China to less than half of its current level, levies at that level could still substantially impede the pace of economic growth, Jones said.

"He'll dial it back to 50% or 40%, whatever. Even when he does that ... it'd be the largest tax increases since the 60s," he said.

Trump has been ratcheting pressure on the Federal Reserve to cut interest rates to help soften the economic blow from the tariffs. But at this point, Jones said, it would take a substantial shift in the Fed's policy stance to stave off more pronounced weakness in the economy and equity market.

"Unless they got really dovish and really, really cut, you're probably gonna go to new lows," Jones said. "When we're at new lows, the hard day will start to follow ... and then we'll get some kind of reality."

Ultimately, whatever happens with stocks isn't Jones' primary concern. The investor, who shot to fame after anticipating and profiting from the 1987 stock-market crash, said he is more focused on artificial intelligence than markets. Jones said he recently participated in an exclusive conference where he learned from top AI experts that "AI poses an imminent threat in our lifetime to humanity."

According to Jones, one of the experts who spoke said it would take an accident where "50 to 100 million people die" for people to take the threat from AI seriously.

Earlier this year, Jones said the stability of financial markets had deteriorated since the days of the first Trump administration. Jones has warned several times in recent years that stocks looked overvalued and could be due for a decline. The latest filing on holdings of Jones' Tudor Investment Corp. showed the firm continued to trim its holdings of Nvidia Corp. $(NVDA)$ during the fourth quarter. Shares of the AI darling have struggled since the start of 2025.

-Joseph Adinolfi

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May 06, 2025 10:27 ET (14:27 GMT)

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