Wall St. Assesses Turbulence’s Impact on Main St.

Wall Street just got hit hard, and Main Street could be next.

There has been a reversal in corporate capital spending plans in recent months, and corporate confidence has slumped.

Though a recession isn’t guaranteed, the market turmoil has economists and analysts revising their economic outlooks and raising the risk of a downturn. People are now wondering whether market turbulence could spill over into the broader economy, Megan Leonhardt and Rebecca Ungarino reported for Barron’s Daily.

Consumer spending—which contributes 70% of U.S. economic growth—and the labor market will be key in determining the effect of trade strife on the outlook.

There are indicators, such as spending by affluent households on things like air travel, Broadway shows, and restaurants. Tariffs could also lead to job losses if employers scale back due to rising costs. So far, the soft sentiment data has been negative.

There has been a reversal in corporate capital spending plans in recent months, and corporate confidence has slumped.

Larry Fink, co-founder and CEO of BlackRock, the world’s largest money-management firm, said the economy is weakening and that CEOs he speaks with already view it as being in a recession.

He called on the Trump administration to focus on the pro-growth agenda it campaigned on.

U.S. employers announced 275,240 job cuts in March—a 60% increase from February—according to placement firm Challenger, Gray & Christmas. The firm noted that most of the cuts stemmed from the Department of Government Efficiency (DOGE), though some have been stalled by legal challenges.

Huntington Bank’s Chief Economist Olu Omodunbi said he will be watching guidance coming out of the upcoming earnings season, which kicks off Friday with big banks. He puts the odds of the U.S. entering a recession in 2025 at about 50%.