Two major Wall Street firms have slashed their year-end targets for the S&P 500 index, signaling growing uncertainty among market strategists. RBC’s head of US equity strategy, Lori Calvasina, reduced her target by over 10%, to 5,550 from 6,200, citing a decline in excess of 5% from where the index ended 2024.
The new projection, which is considered low on Wall Street, was made after President Donald Trump’s tariff rollout torpedoes stocks. This move has become RBC’s new base case for the S&P 500 index this year. The firm also lowered its full-year outlook for S&P 500 earnings per share by $6 to $258.
Wells Fargo’s Investment Institute cut its midpoint expectation for where the S&P 500 index will end 2025 to 6,000 from 6,600, implying a return of just 2%, down from a prior forecast of a 12% gain. The bank attributes this shift due to broad-based menu of tariff increases weighing on spending and profit margins.
The global market sell-off sparked by Trump’s Wednesday action has led to the S&P 500 tumbling over 8% this week, on track for its biggest weekly drop since 2020. With this decline, the index is now in a correction phase, with a drop of over 10% from its recent peak.
The S&P 500 has fallen more than 13% in 2025 and 17% lower than its all-time high in February. The uncertainty among market strategists comes as US economic growth is expected to slow down in 2025, partly due to idiosyncratic factors and the broad-based menu of tariff increases.
Source: https://www.cnbc.com/2025/04/04/wells-fargo-and-rbc-cut-sp-500-targets-as-trump-tariffs-roil-stock-market.html