Cramer Warns: S&P Could Plummet Another 20%

CNBC’s Jim Cramer has issued a stark warning that markets could face a catastrophic “Black Monday” scenario, with the S&P 500 potentially plunging to 4,000—representing an additional 20% decline from Friday’s close. The dire prediction comes as S&P 500 futures tumbled approximately 4% Sunday evening, extending a market rout that has already wiped nearly $7.5 trillion from global stocks since President Trump’s tariff announcement last week.

“I want to see where things settle in… tomorrow is not the bottom because Europe hasn’t been heard from yet. S&P 4000 is where I’m looking,” Cramer stated on CNBC Sunday evening, according to 24/7 Wall St. After including Sunday’s futures decline, markets have now fallen roughly 15% in just three trading days since Trump unveiled his sweeping tariff plans.

The veteran market commentator has been increasingly vocal about the possibility of a market collapse reminiscent of the infamous 1987 crash, when the Dow Jones Industrial Average plummeted 22.6% in a single session. “If the president doesn’t try to reach out and reward these countries and companies that play by the rules, then the 1987 scenario… has the most cogency,” Cramer warned on his show Saturday, as reported by Yahoo Finance.

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A Return to 2023 Levels?

A drop to 4,000 would return the S&P 500 to levels not seen since May 2023, effectively erasing nearly two years of market gains. More significantly, it would mean the index has remained essentially flat over a five-year period—an extraordinarily poor era of returns by historical standards.

While such a decline might seem extreme, market fundamentals could support this bearish case. Wall Street estimates had projected S&P 500 earnings at approximately $280 for 2025, but recession odds now stand at roughly 60% according to JPMorgan. If corporate earnings follow historical recession patterns with a 13% decline, actual earnings could fall closer to $240.

At that earnings level, an S&P 500 at 4,000 would represent a price-to-earnings multiple of 17X—high by historical recession standards but not unreasonable given current market dynamics.

BREAKING: Jim Cramer says he expects the stock market to go down another 20% from current levels pic.twitter.com/0ABs6uoACd
— Inverse Cramer (@CramerTracker) April 6, 2025

Shifting Sentiment

Cramer’s outlook represents a significant reversal from his initial support for Trump’s tariff strategy. “If President Trump stays intransigent and does nothing to ameliorate the damage that I saw these last few days, I’m not going to be constructive here,” he stated, adding that further retaliatory actions from Europe targeting American tech companies would make him “furious.”

The stunning market reaction to Trump’s tariffs has already caused unprecedented damage. The Dow plunged by 3,910 points in the two days following Wednesday’s “Liberation Day” announcement—the worst two-day loss since the pandemic. Total losses have erased approximately $6.6 trillion from U.S. markets, with global losses likely exceeding $10 trillion after Sunday’s futures decline.

Administration Holds Firm

Despite the market mayhem, the Trump administration has shown no signs of changing course. Treasury Secretary Scott Bessent attempted to downplay recession fears during an appearance on NBC’s “Meet the Press” on Sunday, stating: “There doesn’t have to be a recession. Who knows how the market is going to react in a day, in a week. We’re building the long term.”

Meanwhile, Apollo chief economist Torsten Slok offered a more pessimistic assessment: “If these levels of tariffs stay in place for several months and other countries retaliate, it will cause a recession in the US and the rest of the world.”

Contrarian View

Despite his alarming prediction, Cramer—known for his sometimes inconsistent market calls that even inspired an “Inverse Cramer” ETF in 2023—suggested that extreme selling pressure might create significant buying opportunities for long-term investors.

Some market observers agree, noting that stocks with exposure to artificial intelligence and other growth trends have been particularly hard hit, potentially creating attractive entry points for those with time horizons extending beyond the current turmoil.

As markets prepare to open Monday morning, investors worldwide are bracing for what could be another historic session—one that will test whether Cramer’s “Black Monday” prediction materializes or if the worst of the selling has already occurred.

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