Panic has rippled through the minds of retirement account holders in recent days as President Trump’s sweeping new tariffs triggered a sharp market crash, rattling 401(k) investors and erasing billions in retirement savings. The Dow plunged over 6,000 points in just two days while the S&P 500 suffered a 10% loss to end last week, sending shockwaves through the financial system.
Alight Solutions reported that Monday, April 7, was a very active trading day for retirement plan investors, recording the highest daily trading level since the start of the pandemic on March 12, 2020. Monday was the fifth-heaviest trading day since Alight began tracking in 1997 with trading activity of 9.7 times an average day’s amount, with investors fleeing stocks for the safety of fixed income funds.
“Historically, when stock markets have large losses on Fridays, we see very high trading activity in 401(k) plans on the following Monday,” said Rob Austin, head of thought leadership at Alight. “This is because people react to the news by making portfolio adjustments over the weekend, which do not get executed until Monday. Even so, the trading level on April 7th was historically high.”
On “Liberation Day” April 2, Trump announced a baseline 10% tax on all U.S. imports, plus additional “reciprocal” tariffs on imports from 90 countries. He pitched the tariffs as a strategy to reduce the trade deficit between the U.S. and other global powers.
Amid the turmoil, some financial industry heavyweights—including BlackRock CEO Larry Fink, J.P. Morgan’s Jamie Dimon, and Empower’s Ed Murphy—have publicly shared their perspectives on potential impacts to the economy to help Americans navigate the volatility without derailing their long-term goals.
Billionaire hedge fund manager Bill Ackman—who supported Trump’s 2024 presidential bid—took to X Sunday to post concern over the tariffs. He warned that going ahead with the new tariffs was tantamount to launching an “economic nuclear war” and called for a 90-day pause.
“The president is losing the confidence of business leaders around the globe,” Ackman wrote. “The consequences for our country and the millions of our citizens who have supported the president—in particular low-income consumers who are already under a huge amount of economic stress—are going to be severely negative. This is not what we voted for.”
Ackman, the CEO of Pershing Square Capital Management, concluded his post—which has more than 14.2 million views—by saying that unless Trump changes tack, “we are heading for a self-induced, economic nuclear winter, and we should start hunkering down.”
BlackRock CEO Larry Fink warned on Monday at an event for the Economic Club of New York that tariffs will weaken the US dollar and the economy is “weakening as we speak” while repeating his call to allow private markets to invest in retirement plans.
“Most CEOs I talk to would say we are probably in a recession right now,” Fink said Monday, adding that communication with clients has risen sharply of late.
“This is the type of time where we really try to connect,” Fink said. “We’re having more conversations with clients. Probably the last time we had this many conversations with clients at BlackRock was right when we closed out the economy in March of 2020.”
Fink added that in the long run he sees this as “more of a buying opportunity than a selling opportunity. That doesn’t mean we can’t fall another 20% from here too, but I do believe that in the long run the vitality of the United States will persist.”
JPMorgan Chase CEO Jamie Dimon warned that the Trump tariffs threatened to raise prices, drive the global economy into a downturn and weaken America’s standing in the world.
“The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession,” Dimon said in his annual letter to shareholders, released Monday. “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”
JPMorgan has raised its recession odds for this year to 60%. The 2024 letter to shareholders primarily focuses on topics such as geopolitical tensions, economic resilience, and the company’s performance, but does not specifically address issues related to retirement readiness or the U.S. retirement system.
Late Monday, Fisher Investments founder and executive chairman Ken Fisher posted on X, “What Trump unveiled Wednesday is stupid, wrong, arrogantly extreme, ignorant trade-wise and addressing a non-problem with misguided tools. Yet, as near as I can tell it will fade and fail and the fear is bigger than the problem, which from here is bullish.”
30% call spike at Empower
Empower CEO Ed Murphy joined Bloomberg Open Interest Monday to talk about what he’s hearing from clients and his advice for navigating volatile markets.
“If I look at the last week—Thursday and Friday—we saw a 30% increase coming in in the call volume coming into our call centers,” Murphy said. But while Alight reported exceptionally high 401(k) trading activity Monday, it may not have been that way at Empower late last week.
“What we found was, for the most part, people were just seeking account balance information, maybe looking for advice… But trading activity was pretty de minimis. We didn’t see much in the way of trading activity,” Murphy said.
“I think what’s happened is investors have learned to deal with these gyrations in the market and they understand that these investments are longer-term investments, and the industry—I think the media has done a really good job of encouraging people to stay the course.”
Murphy went on to note that most retirement investors are in a diversified portfolio. “So when you look at an index like the S&P down in bear market territory, typically those in retirement accounts are not suffering losses that are consistent with the S&P 500 because of the diversification,” he said. “Seventy percent of the assets are in target-date funds—multi-asset class-type funds so you don’t necessarily see that level of exposure.”
He also said Empower has observed an increase in hardship withdrawals in recent months compared to the historical norm. “We’ve definitely seen an increase in hardship withdrawals. Not material, but certainly an increase,” Murphy said. “I think part of that was fueled by inflation people were experiencing particularly last year and the year before. So that’s something we monitor very carefully. It’s an important consideration.”
Trump: Hang tough
In a Truth Social post on Saturday as his 10% universal tariffs took effect, Trump urged Americans to “hang tough” and acknowledged things “won’t be easy.”
On Monday, President Trump addressed concerns regarding his administration’s tariff policies amid significant market volatility in comments to the media. He asserted that the tariffs are essential for correcting longstanding trade imbalances and revitalizing domestic industries.
“Sometimes you have to take a little medicine to get better,” Trump said, using the analogy to suggest that while the economic pain from tariffs might be uncomfortable now, it’s a necessary step toward achieving what he views as fairer trade and stronger U.S. industry.
Despite sharp declines in major stock indices, Trump remained steadfast, suggesting that the market’s reaction was a necessary adjustment and expressing confidence in the long-term benefits of his trade strategy.
As of 12:45 ET Tuesday, the Dow was up 436.88 points (+1.15%) to 38,402.48 while the S&P 500 was up 70.14 (+1.39%) to 5,132.39 and the NASDAQ was up 104.21(+0.67%) to 15,707.48.
SEE ALSO:
• The Potential Impact of Trump’s Tariffs on Retirement Accounts
• BlackRock’s Fink: Democratize Investing by Expanding Access to Private Markets
• March Most Active Month for 401(k) Trading Since 2020: Alight
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.