Significantly lowered the target price for US stocks, Wall Street "tears up the report," but still insists "it will rise this year"

A tariff policy has cooled market confidence, leading top investment banks to collectively lower their year-end targets for the S&P 500.

On April 2, according to CCTV News, the White House announced that Trump would impose a 10% "baseline tariff" on all countries and additional reciprocal tariffs, triggering a market reaction, with the S&P 500 retreating nearly 14% from its historical high of February 19.

The greater impact occurred at the expectation level. In just two weeks after this storm, ten top investment banks, including JPMorgan Chase, Bank of America, Citigroup, and Evercore ISI, collectively lowered their year-end target for the S&P 500.

At the beginning of the year, the market generally expected the index to break through 6500 points by 2025, but the latest average forecast is only 6012 points. Some analysts even boldly predict that it may drop to 4450 points by the end of the year, leaving a 15% downside from the current level.

If calculated based on Wall Street's latest average forecast of 6012 points, using last year's closing of 5881.63 points as a benchmark, the expected annual increase is only about 2.2%, far below the over 20% increases of the past two years.

At the beginning of the year, Wall Street was still looking forward to the tax cuts and regulatory easing brought by a Republican government, but now only two words remain: adjustment.

Market Expectations Suddenly Cool

Citigroup strategist Scott Chronert wrote in a report:

"The market's expectations for a 'Goldilocks' soft landing at the beginning of the year have now been completely replaced by uncertainty. The recent sharp decline in the U.S. stock market may become the first bear market directly triggered by U.S. presidential policies."

Citigroup lowered its year-end target from 6500 points to 5800 points, while also reducing its 2025 earnings per share forecast from $270 to $255, slightly below the market average expectation of $262.

On April 7, JPMorgan Chase lowered its "baseline expectation" from 6500 points to 5200 points, assuming that "some" tariffs could be alleviated. The bank wrote at the time:

"While we do not believe that 'American exceptionalism' has ended, this April 2 shock occurred at a time of high valuations, crowded positions, and a highly concentrated market."

Peter Berezin, chief analyst at BCA Research, provided the lowest year-end target for the S&P 500 among all analysts surveyed by Bloomberg, predicting in mid-February that the index could drop to 4450 points by year-end, leaving a 15% downside from the current level. He stated in early March that the U.S. economy could fall into recession within the next three months.

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