Billionaire Investor Steve Cohen Warns Of 'Significant Correction' As Trump Tariffs, Immigration Crackdown, And Spending Cuts Shake Market Confidence: 'It's A Tax'

Billionaire investor Steve Cohen, chairman and CEO of Point72 Asset Management, has turned bearish on U.S. markets for the first time in recent memory, citing concerns over trade policies, immigration restrictions, and federal spending cuts that could trigger a significant market correction.

What Happened: Speaking at the FII Priority Summit in Miami Beach on Friday, Cohen warned that President Donald Trump‘s aggressive tariff policies could fuel inflationary pressures and dampen consumer spending.

“Tariffs cannot be positive, okay? I mean, it’s a tax,” Cohen emphasized, adding that reduced immigration could constrain labor force growth compared to the past five years.

His comments come as markets show increasing signs of vulnerability. The S&P 500 tracked by SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust (NASDAQ:QQQ) recorded their steepest single-day losses since December, falling 1.7% and 2.1% respectively on Friday.

Goldman Sachs strategist Scott Rubner has identified additional risk factors, including $2.7 trillion in expiring U.S. stock market derivatives.

See Also: Warren Buffett Favors 5% Treasury Bills Over Buybacks As Berkshire Hathaway’s Cash Pile Balloons To $334 Billion: ‘The Rate Of Change… That’s Most Telling,’ Says Expert

Why It Matters: Cohen specifically criticized the Department of Government Efficiency’s cost-cutting initiatives, spearheaded by Elon Musk, which aims to reduce federal spending by $2 trillion. “When that money has been coursing through the economy over many years, and now, potentially it will be reduced or stopped in many ways, has got to be negative for the economy,” Cohen said.

The hedge fund veteran projects U.S. economic growth will slow to 1.5% from 2.5% in the second half of the year. While he anticipates a “significant correction,” Cohen maintained that it “wouldn’t be a disaster.”

His outlook aligns with broader Wall Street concerns. Bank of America strategists recently warned of a potential 40% S&P 500 plunge, drawing parallels to the dot-com bubble and citing dangerous market concentration in top stocks.

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