This is a huge week for stocks where billions could be made or lost on data drops that come out of the US. And it comes when many would argue one of the smartest market players — Steve Cohen — is getting a little nervous about Donald Trump, his tariffs and some of his other big initiatives.

When you talk about billions made and lost on stocks, Cohen is legendary. Undoubtedly the producers of the TV program called Billions would deny it but their villain, hedge fund manager Bobby Axelrod, is often compared to Cohen at his youngest and most aggressive. When Cohen talks, the market and media listen.

To many, Cohen is often seen as the smartest guy in the room.

For context, it’s important to understand that our market lost 259 points (or 3.03%) last week, despite a rate cut. Remember that history says cuts are good for stocks. Of course, it didn’t help that our jobs report was so solid that we created 44,000 positions in January, which saw some economists say, “forget a May rate cut!”

For the record, other economists and the market are still betting on a cut in May but, more importantly, it was Trump-related issues that unsettled markets globally and we went along for the ride.

Last week, the Dow Jones index lost 2.89%, the S&P 500 gave up 1.67% and the tech heavy Nasdaq lost 2.17%. And the big drops happened more on Friday when US consumer sentiment fell 10%, the big retailer Walmart had a less-than-positive outlook for its profits and the Purchasing Managers’ Index went into negative territory.

The Dow had the worst day of the year dropping 1.69% on Friday, which means out market is expected to open up 64 points down on Monday.

All this negative news coincided with some inflation readings that were higher than expected, so there were market experts pondering whether the US could end up with inflation in a contracting economy. And President Trump’s tariffs are seen as a potentially bad development for both the US economy and Wall Street.

This has consequences for us because Wall Street still has a big impact on our stock market daily.

With all this in mind, let’s look at what Cohen said on Friday at the FII Priority Summit in Miami Beach, Florida. “Tariffs cannot be positive, okay? I mean, it’s a tax,” he told the audience. “On top of that, we have slowing immigration, which means the labour force will not grow as rapidly as … the last five years and so.”

He also thought the big cutbacks on the US public service led by Elon Musk, who wants to save the government $2 trillion, could be a big negative as well. “When that money has been coursing through the economy over many years, and now, potentially, will be reduced or stopped in many ways, it has got to be negative for the economy,” Cohen said. “I think we’re seeing the regime shift a little bit. It may only last a year or so, but it’s definitely a period where I think the best gains have been had and it wouldn’t surprise me to see a significant correction.”

Importantly he added: “I don’t think it’s going to be a disaster.”

The only plus out of this tough week for stocks was that money markets are now betting there’ll be two or three rate cuts in the US, where a few weeks ago, talk was for no more cuts.

With all this on board, the week’s data drops will either hurt or help stocks. So, what am I looking out for? Try these:

1. The monthly Consumer Price Index will be important for betting on a May rate cut.
2. Thursday brings US economic growth for the December quarter.
3. There’s US home sales and manufacturing data that will be looked at for any signs of an economic contraction being on the way.
4. The biggie is core PCE price index, which the Fed sees as the best indicator of US inflation.

If US growth is worse than the expected 2.3% and inflation is higher than expected, then we will see another bad week for stocks. And into all this we have to anticipate the Trump curve balls that have unsettled even the likes of Steve Cohen!

By the way, like him, I think a bit of a sell-off is likely but locally I’m betting lower interest rates, and an improving China will be good for Aussie stock investors. That said, I know there’ll be moments when I might have to allay fears and suggest that the market slump is a buying opportunity.

One last thing and it involves Warren Buffett, the Oracle of Omaha, who has reported building a big cash stash of late, which might suggest he thinks a share market sell-off is on the cards and he wants, as he has said before, “to be greedy when others are fearful”.