Investment bank Goldman Sachs has warned that U.S. President Donald Trump's sweeping new tariffs may spike inflation and shrink the economy in coming months to the point of a recession.

Goldman Sachs expects aggressive duties from the White House to raise inflation and unemployment and drag economic growth to a near-standstill. In a note Sunday, the firm said "we continue to believe the risk from April 2 tariffs is greater than many market participants have previously assumed.

The US economy faces a growing risk of a recession as surging tariffs threaten to stunt growth, reignite inflation and lift unemployment, according to Goldman Sachs.

Plans for Klarna Group and StubHub Holdings to go public have been paused, as both companies delayed their debuts after far-reaching tariffs announced by President Donald Trump earlier this week sparked a broader market selloff.

The Dow Jones Industrial Average dropped more than 1,600 points on Thursday as U.S. stocks led a worldwide selloff after the Republican president's announcement of tariffs against much of the world ignited a shock like none seen since the COVID-19 pandemic.