Finance

Can the U.S. Stock Market’s Rally Outlast the Echoes of 1929? Experts Sound the Alarm

Despite gains, analysts warn of a potential U.S. stock market crash, citing economic factors and policy concerns.

October 21, 2025, 3:17 PM

The NYSE American stock exchange located at 11 Wall Street, Lower Manhattan, New York City. In stock exchange billions of dollars of stocks are traded daily. By Shutterstock.com / Orhan Akkurt

Executive Summary

Market experts are warning of a potential U.S. stock market downturn, likened to the 1929 Great Wall Street Crash, despite strong current performance across major indexes.

Factors cited for the potential crash include escalating debt, economic weakness, limited policy tools, global uncertainty, tariffs imposed by Donald Trump, and the negative influence of artificial intelligence.

Despite these warnings, U.S. stock indexes have shown robust year-to-date gains, and some immediate anxieties, such as Donald Trump’s threats of higher tariffs on China and banking industry concerns, have shown signs of easing.

The Story So Far

Expert warnings of a significant U.S. stock market downturn, reminiscent of the 1929 crash, are circulating due to concerns about escalating debt, economic weaknesses, global uncertainty, tariffs imposed by Donald Trump, and signs of a market bubble, despite the market’s strong year-to-date performance. While some immediate anxieties, such as those related to Donald Trump’s tariff threats and banking sector stability, have recently eased, analysts continue to point to underlying fragilities that could lead to a major correction.

Why This Matters

Despite the U.S. stock market’s robust year-to-date performance, expert warnings of a potential downturn akin to the 1929 crash, driven by escalating debt, economic weakness, and the legacy of past policy decisions, present a significant risk to investors. While immediate concerns such as Donald Trump’s tariff threats and banking sector anxieties have temporarily eased, the underlying fragilities and broader economic uncertainties suggest a highly volatile outlook, potentially leading to a substantial market correction despite current gains.

Who Thinks What?

Market experts Jon Wolfenbarger and financial journalist Andrew Ross Sorkin warn of a potential U.S. stock market downturn or crash, citing factors such as current market sentiment, escalating debt, economic weakness, limited policy tools, global uncertainty, tariffs imposed by Donald Trump, signs of a market bubble, widespread overbuying, and the withdrawal of financial regulations.

Despite these warnings, U.S. stock market indexes have shown robust performance throughout the year, with major indexes like the S&P 500, Dow Jones Industrial Average, Nasdaq composite, and Russell 2000 all experiencing significant year-to-date gains and continuing an upward trend.

Concerns over Donald Trump’s threats of higher tariffs on China have lessened, and worries within the banking industry have subsided as stocks of smaller and midsized banks recovered, indicating some immediate market anxieties are easing.

The U.S. stock market faces a potential downturn mirroring the 1929 Great Wall Street Crash, according to a Morningstar report that cites share market analysts. This warning comes despite a strong year-to-date performance across major U.S. indexes, which have seen significant gains as of October 2025.

Market Downturn Warnings

U.S. Stock Market expert Jon Wolfenbarger indicated that several factors could drive Wall Street to an “ominous position.” These include current market sentiment, escalating debt levels, economic weakness, limited policy tools, global economic uncertainty, and tariffs imposed by Donald Trump. Financial journalist Andrew Ross Sorkin also predicted a market crash, citing signs of a market bubble, widespread overbuying, and the withdrawal of financial regulations.

Adding to these concerns, IMF chief Kristalina Georgieva has issued a warning regarding the potential negative influence of artificial intelligence on the global economy.

Current Market Performance

Despite these dire predictions, U.S. stock market indexes have shown robust performance throughout the year. As of the current period, the S&P 500 has climbed 14.5%, the Dow Jones Industrial Average is up 9.8%, the Nasdaq composite has gained 19.1%, and the Russell 2000 has risen 12.1%.

On Monday, October 20, 2025, major indexes continued their upward trend. The S&P 500 rose 1.1% to 6,735.13, closing within 0.3% of its all-time high. The Dow Jones Industrial Average also increased by 1.1% to 46,706.58, while the Nasdaq composite saw a 1.4% gain to 22,990.54. The Russell 2000 index of smaller companies advanced 1.9% to 2,499.91.

Easing Concerns and Other Factors

Some immediate market anxieties have shown signs of easing. Concerns over Donald Trump’s threats of higher tariffs on China, which previously triggered significant Wall Street swings, lessened after Trump indicated such high tax rates were unsustainable. Similarly, worries within the banking industry have subsided, as stocks of smaller and midsized banks recovered some losses following recent warnings about potentially problematic loans.

Outlook

The U.S. stock market presents a dichotomy of strong current performance against expert warnings of a looming bear market, fueled by a range of economic and policy-related factors. While some immediate concerns have eased, analysts continue to highlight underlying fragilities that could lead to a significant market correction.