Thursday, April 24, 2025

Updated S&P 500 Downside Projections and Analyst Forecasts (as of April 24, 2025)

Strategist/FirmDownside TargetPotential Drop % from Current (5,288)DirectionPotential Drop % from ATH (approx. 6,300)Key Catalyst/ScenarioAdditional Notes
Economy Forecast Agency3,969 (July)-24.9%-37.0%Tariffs, inflation, negative GDPMost bearish; sees further downside into summer
Economy Forecast Agency4,026 (June)-23.8%-36.1%Tariffs, inflation, negative GDPPersistent volatility through Q2
Economy Forecast Agency4,256 (May)-19.5%-32.4%Tariffs, inflation, negative GDPShort-term downside risk
Economy Forecast Agency4,647 (April)-12.1%-26.2%Tariffs, inflation, negative GDPNear-term risk; aligns with recent volatility
UBSNot specifiedNot specifiedNot specifiedTariff scenarios, earnings riskExpects further declines into Q3, especially if tariffs persist
Capital Economics5,500 (2025 YE)-14.9% (from ATH) / -14.9% (from 6,300)-12.7%Faltering AI trade, tariffsCut forecast from 7,000 to 5,500 for 2025
UBS5,800 (2025 YE)+9.7%-7.9%Tariffs, earnings riskLowered YE target from 6,400 to 5,800
RBC5,550 (2025 YE)+5.0%-11.9%Tariffs, earnings riskLowered YE target from 6,200 to 5,550
MarketWatch Consensus5,950 (2025 YE)+12.5%-5.6%Tariffs, earnings, recovery hopesMedian of major Wall Street forecasts
Morningstar/MarketWatch6,056 (avg)+14.5%-3.9%Tariffs, earnings, recovery hopesAverage of updated analyst forecasts
Bill Gross (Bond King)N/AN/AN/AN/ATariff turmoilWarns investors not to buy the dip; "falling knife"
BarclaysNot specifiedNot specifiedN/ANot specifiedTech underperformance, sector risksWarns tech sector underperformance is outsized; expects tech to lead recovery
JPMorganNot specifiedNot specifiedN/ANot specifiedTariffs, recession risk60% chance of global recession if tariffs persist

Notes:

  • Current S&P 500 level used: 5,288 (as of April 23, 2025).

  • Approximate all-time high (ATH): 6,300 (early 2025).

  • Economy Forecast Agency provides the most granular and bearish month-by-month outlook, with a possible bottom near 3,969 in July 2025.

  • Wall Street consensus for year-end 2025 has dropped from the 6,400–7,000 range to a median of 5,950, with a wide range of 5,200–7,000.

  • UBS, RBC, Capital Economics have all slashed their year-end targets in response to tariff uncertainty and deteriorating earnings expectations.

Summary of Changes from Previous Forecast

  • Bearish projections have grown more severe: The Economy Forecast Agency now sees a potential S&P 500 bottom as low as 3,969 in July 2025, representing a nearly 25% drop from current levels and a 37% drop from the all-time high.

  • Wall Street year-end targets have been slashed: The median forecast has dropped from around 6,400–7,000 to 5,950, with several major banks (UBS, RBC, Capital Economics) lowering their targets by 10–15% in the past month.

  • Forecast range has widened: The spread between the most bullish and most bearish year-end targets has expanded dramatically, reflecting heightened uncertainty.

  • Tariffs and earnings risk dominate outlook: Most strategists cite persistent tariff threats, margin compression, and the risk of a global recession as the primary reasons for reduced targets and increased downside risk.

  • Tech sector singled out: Barclays notes that technology's underperformance is already outsized, but expects it to lead any eventual recovery.

Sources Used in This Update

  • CNBC (April 21, 2025): Live market updates and UBS/Barclays commentary.

  • Morningstar/MarketWatch (April 4, 2025): Analyst target downgrades, Capital Economics, UBS, RBC, Bill Gross.

  • Investopedia (April 12, 2025): Analyst forecast range and averages.

  • MarketWatch (April 15, 2025): Year-end consensus and forecast methodology.

  • Yahoo Finance UK (April 7, 2025): Economy Forecast Agency month-by-month downside targets.

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