Morgan Stanley (MS) shares tumbled 5.31% in pre-market trading on Friday, as the banking sector faces significant pressure following President Donald Trump's announcement of sweeping global tariffs. The move comes amid a broader market selloff, with major indices experiencing their worst trading day since 2020.

The banking giant's stock decline reflects growing concerns about the potential economic slowdown resulting from the new tariffs. Analysts worry that a weaker economy could lead to reduced loan demand, increased delinquencies, and a slowdown in merger and acquisition activities, all of which could hurt Morgan Stanley's profitability. The company, which operates large investment banking and wealth management businesses, is particularly vulnerable to market volatility and economic uncertainty.

Moreover, the potential for diminished trading activity and lower fees on assets under management due to falling equity markets could further impact Morgan Stanley's revenue streams. As investors grapple with the possibility of stagflation – high inflation combined with low economic growth – financial institutions like Morgan Stanley face an increasingly challenging operating environment.