The Russell 2000, which includes small companies that are more sensitive to downdrafts in the economy than those in the S&P 500, appears likely to enter a bear market.

Tariffs will be a headwind to corporate earnings since businesses have only two options: Absorb the cost increases, or pass the cost increases along.

On-again, off-again tariffs, mass government layoffs, funding cuts and immigration crackdowns have seriously spooked Wall Street, which is emphatically rejecting President Donald Trump’s chaotic economic agenda.

President Donald Trump recently expanded exemptions on tariffs imposed on Canada and Mexico. The temporary relief has sparked cautious optimism among businesses, but trade tensions have continued to create uncertainty.