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The stock market has been on a roller coaster since President Trump revealed higher-than-expected reciprocal tariffs on April 2. Global stocks fell sharply following the tariff announcement before rallying after President Trump paused reciprocal tariffs for 90 days, excluding China, on April 9.
The tariff seesaw has forced investors to reconsider economic and corporate profit outlooks following the S&P 500's robust 23% gains in 2024.
Recent economic data suggests a potential slowdown in the U.S. economy is underway. Tariffs could push us into stagflation or an outright recession, casting a long shadow over stocks, given that future expectations for revenue and profit growth primarily determine stock prices' valuation.
Related: Surprising recession news rocks stocks
If tariffs spark inflation and crimp supply chains, the U.S. economy could fall into a recession, dragging global economies down with it.
Global fund manager Mark Mobius is well aware of the potential domino effect associated with "when America sneezes, the world catches a cold."
Mobius is a legendary fund manager who is an expert in managing money outside the U.S., particularly in developing and emerging markets. He began managing Franklin Templeton's Emerging Markets Group in 1987, a role he held for 30 years before founding Mobius Capital Partners LLP.
Mobius has seen a lot over the past thirty-plus years, and this week, he offered a surprising message on how he's managing money in the wake of recent uncertainty.
Mark Mobius unveils surprising take on stocks
A tectonic shift is underway to reshape global trade, creating significant uncertainty roiling stock markets worldwide.
The iShares Europe ETF (IEV) fell 11%, the iShares Japan ETF (EWJ) fell 10%, and the iShares China Large-Cap ETF (FXI) fell 17% after Trump's "Liberation Day" tariffs announcement.
Most global markets have recovered some losses since reciprocal tariffs were paused for 90 days on April 9, but that doesn't necessarily mean investors are out of the woods yet.
"He (Donald Trump) has made revolutionary changes that affect not only the U.S. but the world... We're in a new world of thinking... We've got to get used to a new world order," said Mobius in a Bloomberg interview. "We think uncertainty will continue for the next three, four, six months, and we've got to get used to it."
Mobius has navigated the global markets' twists long enough to spot risks and opportunities. He's credited with predicting the post-Great Recession rally in 2009 and profiting from the Asian financial crisis in 1997 and Russia's stock market drop in 1998.