The S&P 500 lost 1.04% yesterday as the VIX “fear index” for volatility spiked 10%, but futures were up 0.16% this morning, suggesting traders may be putting a temporary pause on the panic selling that has gripped markets over the last 24 hours.
That panic came from two sources, one real and one fictitious:
This morning, more sober heads on Wall Street and in the City of London are pointing out that maybe the stock markets shouldn’t be selling off based on a blog post that opens by denying it is “AI doomer fan-fiction.”
Trump peppered his trade partners with threats yesterday.
All of the above, and the uncertainty around them, are likely drags on trade, GDP, and thus—inevitably—the stock market.
Goldman Sachs analyst Pierfrancesco Mei estimated some numbers for that this morning: “Tariff rates could rise further or the share of the costs that fall on consumers could rise more than we expect. We estimate that an additional 5pp [percentage point] increase in the effective tariff rate would boost core PCE inflation by 0.5pp relative to our baseline and reduce 2026 GDP growth by 0.4pp, mainly through its tax-like impact on consumers and businesses,” he told clients.
And if the markets are further spooked by invective from the Oval Office or AI bearishness, “A potential stock market correction could weigh on consumer spending and business confidence. We estimate that a 10% decline in equity prices sustained through 2026Q2, for example, would reduce 2026 GDP growth by about 0.5pp relative to our baseline,” he wrote.
Here’s a snapshot of the markets this morning prior to the opening bell in New York:
