The Stock Market Flashes a Warning as Investors Get Bad News About President Trump's Tariffs. History Says This Will Happen Next.

Economic Indicators - The ratio of unemployed persons to job openings reached 1.1 in November, the highest level since 2021, with monthly job openings averaging 7.4 million, the lowest since 2020 [1] - The unemployment rate increased from 4% in January 2025 to 4.6% in November 2025, the highest level since September 2021 [6][8] - The U.S. economy added an average of 55,000 jobs per month through November 2025, the lowest number since the Great Recession in 2009, excluding the pandemic [5] Manufacturing Sector - U.S. manufacturing activity contracted in December, marking the 10th consecutive decline, with uncertainty attributed to tariff costs [2] - The average tax on U.S. imports has increased to about 16%, the highest level since the 1930s, following tariffs imposed by President Trump [4] Tariff Impact - U.S. companies and consumers paid 82% of the tariffs in October 2025, with this figure expected to remain at 75% by July 2026, indicating that foreign exporters are not absorbing the cost increases [3][16] - President Trump's tariffs have coincided with a reduction in manufacturing activity and a weakening labor market, potentially acting as a significant headwind to economic growth [9] Stock Market Analysis - The S&P 500 had a CAPE ratio of 39.9 in December, a valuation last seen during the dot-com crash in 2000, suggesting potential declines in the index over the next one to two years [10][7] - Historical data indicates that following incidents where the S&P 500's CAPE multiple exceeded 39, the index has dropped by an average of 4% in the next year, with returns ranging from positive 16% to negative 28% [13][14] Consumer Sentiment - Consumer sentiment recorded its lowest annual average in history in 2025, as per data collected by the University of Michigan since 1952 [5]