Marc Faber warns that U.S. stocks are headed for a volatile tumble because investor sentiment is way too bullish for the Trump bull market rally to continue.
"Very simply, the market starts to go down. As it goes down, it will start triggering selling, and then it will be like an avalanche," Faber recently told CNBC. "I would underweight U.S. stocks."
Faber isn't blaming the new Donald Trump administration for the looming collapse/
"One man alone, he cannot make 'America great again.' That you have to realize," the publisher of the Gloom, Boom & Doom report said.
"Trump, unlike Mr. Reagan, is facing huge, huge headwinds — including a debt to GDP that is gigantic, as it is in other countries."
But all isn't so gloomy around the world.
"China looks quite attractive," said Faber. "For the next three months, money can flow into China. The economy, surprisingly, has begun to do quite well. We see that in retail in Hong Kong. We see that in the hotel industry, and we see that in the demand for commodities."
U.S. markets have seemingly been setting record highs on a daily basis amid a Trump honeymoon with investors. Reuters reported.
Trump's first address to a joint session of Congress on Tuesday evening is being closely watched by investors for clues on how he planned to carry out his agenda of boosting economic growth,
"If we have a market that is willing to accept a roadmap that says we are going to repeal and replace Affordable Care Act and then have some form of tax reform by the August recess, I think the market will continue to be supportive," said Art Hogan, chief market strategist at Wunderlich Equity Capital Markets in New York.
Trump's promise a few weeks ago of a "phenomenal" tax announcement helped rekindle a post-election rally, driving the main U.S. markets to record highs.
But with details scant on how he planned to implement his agenda, investors have turned wary and the markets have traded range-bound.
(Newsmax wire services contributed to this report).
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