DoubleLine Capital CEO Jeffrey Gundlach said Monday that stocks have more room to fall as chances of a recession have gone up due to President Donald Trump’s imposition of a higher tariff regime on imports into the U.S. “You’re kind of in middle innings of this thing,” Gundlach said on CNBC’s ” Closing Bell. ” “It’s a little bit disconcerting that we don’t have more of a bounce in the market. I think investors need to stay on defensive mode.” “The extent to which investors hold cash, I would continue to do that until we get something more of a sustained bottom. … I’m looking for 4,500 on the S & P 500,” he said. Trump’s shocking tariff rollout rattled stocks for a third day on Monday, with the S & P 500 falling to 5,062.25. The equity benchmark briefly entered a bear market during the session, but was last off nearly 18% from its recent all-time high in February. Gundlach’s 4,500 target would represent another 11% decline from Monday’s market close. Gundlach, whose firm managed about $95 billion at the end of 2024, last month recommended holding as much as 25% to 30% in cash, and said Monday he would not deploy that cash just yet. The widely followed investor believes Trump won’t walk back his punitive policies and investors will have to deal with the uncertainty for weeks, if not months, longer. “He’s keeping people guessing, and he’s not going to back down. I don’t think so,” Gundlach said. “So this is something that is going to have to play out, and we’re going to be dealing with this, I would say, certainly, for weeks or months, and not just days.” The White House has remained defiant in the face of unraveling markets, reiterating that the shockingly high tariffs unveiled Wednesday night will take effect April 9, as scheduled. Trump threatened Beijing with even higher tariffs after China retaliated. Other countries are also readying their own countertariffs.