Wall Street Starts to Rethink Lofty S&P 500 Forecasts for 2025

Alexandra Semenova

Mon, Mar 10, 2025, 2:30 AM 3 min read

(Bloomberg) — For 2 consecutive years, stock-market prognosticators lifted their outlooks for the S&P 500 Index (^GSPC) implicit and implicit again to support up with an unrelenting rally.

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Now conscionable nether 3 months into the year, sell-side strategists astatine firms including JPMorgan Chase & Co. (JPM) and RBC Capital Markets are starting to temper bullish calls for 2025 arsenic President Donald Trump’s tariffs stoke fears of slowing economical maturation and nonstop US equities into a tailspin.

While nary of the soothsayers person pulled the trigger conscionable yet, the rearrangement — which comes little than 3 weeks aft the S&P 500 deed a grounds — is showcasing a rising consciousness of uncertainty among Wall Street forecasters. Historically, strategists’ statement people has typically lagged the existent market’s moves by astir 60 days, according to an investigation from Piper Sandler & Co.

“It volition stay hard to afloat handicap the imaginable argumentation downsides fixed deficiency of clarity connected timing, scope, and extent of changes,” JPMorgan strategist Dubravko Lakos-Bujas wrote successful a enactment to clients. “In the interim, investors should clasp volatility.”

His squad warned connected Thursday that their year-end forecast for the S&P 500 of 6,500 — a astir 13% summation from Friday’s adjacent — whitethorn not materialize earlier December, citing a “large modular error” astir the fig against heightened uncertainty.

“I don’t deliberation anybody has much condemnation contiguous astatine all: much uncertainty, yes — a wider set of outcomes, yes,” Michael Kantrowitz, Piper Sandler’s main concern strategist, said.

Indeed, Lakos-Bujas indicated the S&P 500 could plaything anyplace from his archetypal year-end projection to arsenic debased arsenic 5,200 passim 2025.

The cautious code marks a reversal from earlier this twelvemonth erstwhile helium and peers crossed large banks called for coagulated banal gains successful the months up arsenic deregulation, taxation cuts, and different Trump policies perceived arsenic “pro-growth” were acceptable to propel the market. Instead, levies connected goods from trading partners specified arsenic Canada, Mexico and China person forecasters simmering down their optimism.

Separately, the bank’s trading table flipped to a tactically bearish stance, saying expectations for gross home merchandise are poised to crater, net revisions volition determination lower, and astir notably, Wall Street volition person to revisit year-end forecasts for the S&P 500.