Crypto, Stock Bloodbath Continues as Market Prices in Rolling Recession

• Polymarket and Goldman Sachs put the probability of a U.S. recession in 2025 at high levels.
• Donald Trump avoided directly addressing recession concerns, insisting his economic policies needed time.
• Global markets plunged as investors braced for economic turbulence.

Markets are bleeding as fears of a recession take hold, sending stocks and crypto tumbling.

Wall Street just endured its worst week since the election, with investors pricing in a potential U.S. downturn.

Uncertainty over Donald Trump’s tariff policies, government layoffs, and weakening economic indicators have fueled the selloff, while recession predictions from major banks add to the panic.

Stocks and Crypto Extend Losses Amid Economic Jitters

The market rout continued on Tuesday, with U.S. stocks tumbling further.

• The S&P 500 fell 2.7%, while the Dow Jones Industrial Average declined 2%.
• Asian markets initially followed the U.S. slump, with Japan’s Nikkei dropping 0.6% and South Korea’s Kospi down 1.3%.
• Even traditional safe havens showed weakness, with gold slipping below $2,900 as traders sought liquidity.

The downturn also hammered cryptocurrencies. The global crypto market cap fell 3.5% over the past 24 hours to $2.61 trillion.

Bitcoin (BTC) dropped 1.7% to $80,700, while Ethereum (ETH) tumbled 7.7% to $1,900.

Concerns over Donald Trump’s shifting tariff policies, government layoffs, and weakening economic indicators fueled the downturn.

At the same time, major financial institutions have increased their recession forecasts, further rattling market sentiment.

Investors Brace for a U.S. Recession

Recession odds have surged in betting markets, with Polymarket now pricing the probability of a U.S. downturn in 2025 at 38%.

Goldman Sachs has also raised its recession forecast to 20%, while Morgan Stanley has warned of slowing economic growth.

When asked about the possibility of a recession, President Trump declined to give a clear answer, stating that “it takes a little time” for his economic policies to take effect.

His Commerce Secretary, however, dismissed concerns outright.

Is a U.S. Recession Inevitable?

A recession is officially defined as “a significant decline in economic activity spread across the economy lasting more than a few months,” according to the National Bureau of Economic Research (NBER).

Gregory Daco, Chief Economist at EY Parthenon, warned that while a recession isn’t imminent, private sector activity is slowing.

“Consumer spending, a key economic pillar, remains strong but is driven largely by higher-income individuals—any decline in their confidence could be concerning,” he said.

Trump’s sweeping tariffs on China, Canada, and Mexico have further fueled uncertainty.

Daco added that “a lack of clarity” in economic policy is creating hesitation among businesses and investors, raising risks of a more pronounced slowdown later in 2025.

Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank, told CCN:

“Recession bets are rising by the day. Companies are giving murkier forecasts due to tariffs, and the U.S.’ biggest trading partners are responding. The diving U.S. yields on recession bets and rising safe-haven demand tell us how investors feel about what’s cascading from the White House—it’s the worst market sentiment since Covid.”

Ozkardeskaya noted that a softer-than-expected CPI report from the U.S. could ease the selloff by fueling expectations that the Federal Reserve may step in.

“But a stronger-than-expected figure would be very bad news,” she warned.