Revised Targets for the S&P 500

Recent developments in U.S. trade policy have led to significant downward revisions in the S&P 500 index targets by multiple Wall Street banks. A total of 10 major banks, including prominent institutions like JPMorgan and Bank of America, have slashed their estimates following President Donald Trump’s announcement of a 10 percent duty on a broad range of U.S. imports.

Market Reaction

Since the implementation of initial tariffs on April 2, the S&P 500 has experienced a notable decline, dropping over 7 percent during a period of volatile trading. From its record high on February 19, the index has decreased by 14 percent. Although Trump has temporarily halted the imposition of reciprocal tariffs and created exceptions for certain electronics, the uncertainty surrounding trade policy continues to weigh heavily on market sentiment.

Economists’ Perspectives

Experts warn that the unpredictable nature of recent trade strategy shifts could lead to slower economic growth or possibly trigger a recession, thus negatively affecting the earnings of publicly traded U.S. companies. In a recent commentary, Citigroup analyst Scott Chronert remarked, “The goldilocks sentiment in place entering this year has given way to abject uncertainty.”

Current Forecasts

The average target for the S&P 500 set by Wall Street analysts has now dropped to 6,012 for the end of the year, contrasting sharply with the previous estimate of 6,539. As of this week, the index was recorded at 5,283. Despite these lowered expectations, strategists anticipate a 14 percent rise in the index moving forward, projecting only modest increases of about 2 percent for 2025—a stark contrast to the more than 20 percent rallies observed in 2023 and 2024.

Key Bank Predictions

Citigroup revised its year-end S&P target from 6,500 to 5,800, while also lowering its 2025 earnings per share estimate from $270 to $255, falling just short of the average forecast of $262 according to Bloomberg data. Chronert mentioned that the recent decline in equity markets could potentially mark “the first bear market specifically triggered by U.S. presidential actions.”

JPMorgan similarly cut its target on April 7 to 5,200 from 6,500, cautiously assuming some relief on tariffs. They noted that despite confidence in U.S. economic strength, the “liberation day” shock coincided with rich valuations and overcrowded positioning.

A Cautionary Voice

Peter Berezin from BCA Research offers a sobering outlook, projecting the S&P 500 to fall to approximately 4,450 by year-end, indicating a potential decline of 15 percent from current levels. In early March, Berezin also highlighted a likely onset of a U.S. recession within the next three months, encapsulating a growing sentiment of caution among analysts. “There’s a lot of groupthink on Wall Street,” Berezin added.