Wall Street legend warns: US stocks will hit new lows, AI may exterminate 50% of humanity

Source: Jinshi Data

Billionaire hedge fund manager Paul Tudor Jones, founder and chief investment officer of Tudor Investment, issued a stark warning on Tuesday that even if President Trump reduces his aggressive tariffs, the U.S. stock market is bound to hit new lows.

"To me, it's clear. Trump has locked in tariffs. The Fed is holding out for a rate cut. That's not good for the stock market," Jones said on CNBC's "Squawk Box." "We're likely to hit new lows."

"He'll bring the tax rate back to 50% or 40%, whatever it is. Even if he does that ... it would be the biggest tax increase since the '60s," the widely followed Jones continued, "so you could take 2%-3% off economic growth."

Last week's GDP report showed that ominous clouds are gathering over the U.S. economy: GDP was -0.3% in the first quarter, the first negative growth since the first quarter of 2022. Jones believes the stock market has not found a bottom yet as macroeconomic conditions continue to deteriorate. Federal Reserve Chairman Jerome Powell said he expects policymakers to wait for "greater clarity" on the impact of trade policy before making further adjustments. As of Tuesday, interest rate swaps were pricing in three 25 basis point rate cuts by the Fed by the end of the year, with the first expected in July. "Unless they're really dovish and really really cut rates, it's very likely that we're going to go to new lows," Jones said. "When we get to new lows, the tough day will start, and that may prompt the Fed to act, prompt Trump to act. And then we'll get some kind of reality check." Jones rose to fame for predicting and profiting from the 1987 stock market crash. In addition to his concerns about the trade war and the markets, Jones is deeply uneasy about the development of artificial intelligence, which he sees as a looming threat to humanity.

Sharing takeaways from an exclusive tech conference he recently attended, Jones said that while AI could be a “force for good” in the areas of health and education, it was clear that “AI will pose an imminent security threat to humanity in our lifetimes”.

As part of his doomsday warnings – echoing those made by Elon Musk and BCA Research in recent years – Jones warned that “there is a 10% chance that AI will kill 50% of humanity in the next 20 years.”

Jones was vague on the specifics of their arguments but mentioned “biohackers” and “weapons”.