Bond King Gundlach Predicts 14% S&P 500 Drop Amid Tariff Uncertainty

Jeffrey Gundlach, the founder and CEO of DoubleLine Capital, has expressed a bearish outlook on the US stock market. He predicts that the S&P 500 index could fall by around 14% from its current level, which is 5,222 at the time of writing. This prediction comes amid the imposition of import tariffs as high as 50% by the world’s largest economy, which has caused market uncertainty.

Gundlach, who earned the nickname “Bond King” due to his success in the bond market after the 2008 financial crisis, believes that the market uncertainty caused by the imposition of import tariffs in the US is going to persist for the foreseeable future. He does not see a quick resolution to the tariff issue, stating that US President Donald Trump is likely to continue with the tariffs and keep people guessing. Gundlach also expressed confusion over the formula used to set these tariffs, stating that it does not make much sense to him mathematically.

Gundlach advises investors to stay on defensive mode and hold cash until a sustained bottom is reached. He is looking for the S&P 500 index to fall to 4,500, which would represent a significant decline from its current level. Gundlach's warning underscores the need for caution in the current market environment, as he advises investors to stay vigilant and prepared for potential downturns. His insights highlight the importance of risk management and strategic planning in navigating the complexities of the financial markets.