Wall Street Bleeds $2.85 Trillion as Recession Odds Surge on Polymarket

Wall Street endured a historic rout following President Donald Trump’s sweeping new tariffs, triggering sharp declines across major indexes and fueling fears of a looming recession. The blowback has also shaken sentiment on Polymarket, where traders now assign a 49% probability to a U.S. recession by 2025—up from just 39% days earlier.

Tariffs Unleash Global Shockwaves

On April 2, 2025, Trump unveiled the “Liberation Day” tariffs—a blanket 10% duty on all imported goods, set to take effect April 5. The policy targets nearly 90 countries, including China, the EU, Canada, and Mexico. While framed as a corrective measure for trade imbalances, the move rattled economists, who fear it could trigger stagflation and prolonged global disruption.

Wall Street reacted immediately. By April 3, the Dow Jones Industrial Average plunged 1,630 points in its worst day in years. The S&P 500 recorded its steepest loss since the 2020 pandemic-induced selloff, while the Nasdaq also cratered. The cryptocurrency market wasn’t spared—Bitcoin sank 6.7%, dragging the broader sector down by over 5%.

Polymarket Traders Brace for Downturn

The volatility has been mirrored on Polymarket, where over $1.1 million has been wagered on the likelihood of a recession. Following Trump’s tariff announcement, the odds surged to 49% and remained steady as of 4:30 p.m. ET Thursday. The contract’s comment section has become a flashpoint for political debate, with one trader remarking, “Remember when people laughed at warnings about Trump crashing the economy?”

Wall Street’s total losses from the sell-off reached $2.85 trillion, with the S&P 500 absorbing the bulk of the decline. As the dust settles, investors are left to weigh whether Wall Street is simply reacting with short-term panic—or if deeper economic trouble lies ahead.

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