Paul Tudor Jones says stock market will hit new lows even if Trump cuts China tariffs to 50%

Billionaire hedge-fund manager Paul Tudor Jones said Tuesday stocks are bound to hit new lows even if President Donald Trump tones down his aggressive tariffs on China.

“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 on CNBC’s “Squawk Box.” “We’ll probably go down to new lows, even when Trump dials back China to 50%.”

The widely followed investor’s bearish comments came after Trump’s rollout of the highest levies on imports in generations shocked the world last month, triggering extreme volatility on Wall Street. The S&P 500 suffered a severe sell-off but has since recouped much of the losses, sitting 8% below its all-time high.

Trump has slapped tariffs of 145% on imported Chinese goods this year, prompting China to impose retaliatory levies of 125%. China said last week it is evaluating the possibility of starting trade negotiations with the U.S.

“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,” Jones said. “So you can kind of take 2%, 3% off growth.”

Jones, the founder and chief investment officer of Tudor Investment, believes stocks haven’t found a bottom as macroeconomic conditions continue to deteriorate. The Fed has held its key overnight lending rate steady since December in a range between 4.25% and 4.5%. Fed Chair Jerome Powell has said he expects policymakers to “wait for greater clarity” on trade policy ramifications before adjusting any further.

“Unless they got really dovish and really, really cut, you’re probably gonna go to new lows,” Jones said. “And then when we’re new lows, the hard day will start to follow, and it’ll probably create the Fed to move, create Trump to move. And then we’ll get some kind of reality.”

Jones shot to fame after he predicted and profited from the 1987 stock market crash. He is also the chairman of nonprofit Just Capital, which ranks public U.S. companies based on social and environmental metrics.