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The banks of Wall Street reduced their objectives for the gauge of the main American actions during the past fifteen, while fears increase on the potential economic benefits of the trade war of President Donald Trump.
At least 10 banks, including JPMorgan, Bank of America and Evercore ISI, reduced their estimates for the S&P 500 index in the weeks following Trump's decision to impose a basic law of 10% on most American imports and higher “reciprocal prices” sent shock waves through financial markets.
The S&P 500 has dropped more than 7% in very volatile trade since the announcement of initial samples on April 2 and 14% since it hit a record on February 19. Trump has since interrupted reciprocal prices and has created a cut for smartphones and another electronics.
But economists say that the uncertainty caused by rapid U tricks in trade policy could still slow down economic growth, or even trigger a recession – something that would achieve the benefits of the American companies listed.
“The Goldilocks feeling in place entering this year has given way to abject uncertainty,” said Scott Chronert, Citigroup analyst.
The Middle End of Year S&P objective of Wall Street is now 6,012 – against 6,539 at the end of last year. The S&P 500 finished this week at 5,283.
The new forecasts mean that, despite the growing concerns of slowing down economic growth, the strategists nevertheless expect the index to increase by 14% in the coming months. It would mark a gain of only 2% for 2025, a major slowdown in consecutive rallies of more than 20% in 2023 and 2024.
The newly cautious tone of banks has marked a humiliating reversal since the beginning of the year, when many market players expected a lighter drop in taxes under a republican administration to increase business profits.
Citigroup said on Friday that it expects the S&P 500 to end the year at 5,800, down a previous call from 6,500. The bank also reduced its profit by action from $ 2,525 to $ 255, against $ 270, just below average forecasts of $ 262, according to Bloomberg data.
Chronert said that the recent net fall for American actions could become “the first bear market specifically triggered by American presidential actions”.
JPMorgan lowered his goal of “basic case” on April 7 to 5,200, against 6,500, assuming a “partial” repair on the prices. “Even if we do not believe that exceptionalism is over,” wrote the bank at the time, “this shock (Liberation Day) came at a time when the evaluation was rich, the positioning was congested and the leadership was particularly narrow.”
Peter Berezin at BCA Research, who has the lowest 2025 price target for the S&P 500 among the analysts interviewed by Bloomberg, said in mid-February that he expects the index to end this year about 4,450, which implies a drop of 15% compared to the current levels. In early March, he said that an American recession was to start in the next three months.
“There is a lot of group thinking at Wall Street,” said Berezin.
