After predicting continued “American exceptionalism,” Wall Street has suddenly turned more pessimistic. On Friday, analysts at Bank of America said “U.S. exceptionalism is fading” and warned recent economic reports point to a growing likelihood of stagflation—a combination of weak growth and high inflation.

Michael Brown, senior research strategist at Pepperstone, was more blunt, saying late Thursday that the dollar is tumbling “with jitters over the state of the U.S. economy continuing to exert considerable pressure, and the ‘U.S. exceptionalism’ theme now being in tatters.”

The White House told Fortune in a statement that tariffs played a key role in America’s industrialization, stretching back to the 1800s and President William McKinley.

“President Trump was elected with a resounding mandate to institute his America First economic agenda of tariffs in addition to deregulation, tax cuts, and the unleashing of American energy,” spokesman Kush Desai said. “Trillions of dollars in investment commitments from Apple, TSMC, and other industry leaders are indicative of the successes in store for America under President Trump.”

To be sure, U.S. growth was already expected to cool a bit from robust gains to still-solid expansion. But in recent weeks, a range of economic indicators has started worsening, including consumer spending and inflation expectations, as tariffs loom.

Surveys of businesses have also highlighted growing concern about tariffs and uncertainty about where they’re headed. In addition to tariffs on Mexico, Canada and China, Trump has threatened tariffs on steel, aluminum, the EU, chips, autos, and pharmaceuticals, as well as retaliatory duties across all trade partners.

The Atlanta Fed’s GDPNow tracker shows the first quarter is currently on track for a 2.4% contraction after signaling a 1.5% decline last week and reversing from 2.3% growth on Feb. 19. While the widely followed indicator can be volatile and was hammered by a deeper trade deficit, Wall Street analysts are downgrading their U.S. growth views.

On Friday, JPMorgan said the economy would slow toward a 1% pace if tariffs on Canada and Mexico are imposed after large portions were put on a one-month pause. That’s down from their earlier view of 2% this year. Meanwhile, others on Wall Street are pricing in greater odds of a recession, though it remains outside the scope of their baseline forecasts.

By contrast, JPMorgan sees the eurozone economy expanding by 2%—unless an intense U.S.-EU trade war erupts. That’s as European leaders and Germany’s incoming leadership have vowed a seismic break from earlier fiscal austerity and toward debt-fueled spending, especially on defense as the U.S. distances itself from traditional allies and warms up to Russia.

China also plans to ramp up stimulus as Trump has already doubled tariffs on imports from the world’s second largest economy to 20%.

The sudden upending of economic prospects is being reflected in stocks. The S&P 500 has lost 2% in the year to date after soaring more than 20% in 2023 and 2024. But Germany’s DAX index is up 15.6%, and Hong Kong’s Hang Sing index has shot up 21% helped by bullishness on Chinese AI technology.

For this part, Trump said Thursday he isn’t watching the stock market as he plans his tariff policies and repeatedly blamed “globalists” for the recent stock selloff.

“We’ve been treated very unfairly as a country,” he said. “We protect everybody. We do everything for all these countries, and a lot of these are globalist in nature.”

In an op-ed on Wednesday, market gurus Ed Yardeni and Eric Wallerstein said they still see a 55% chance of a “Roaring 20s” scenario where the US economy continues to power ahead, fueled by a tech-driven boost.

But they cut the odds of a bullish “meltup” to 10% from 25%, while raising the odds of a bear market and a tariff-induced recession to 35% from 20%.

“We are still betting on the resilience of consumers and the economy,” they warned. “However, Trump Turmoil 2.0 is significantly testing the resilience of both.”