Trump, the "Master of Face-Changing," investment banks "slap both sides," and the report can't be torn up in time

From Apocalypse to Celebration: Strategists Completely Shift in a Month, Major Wall Street Investment Banks Collectively "Admit Mistakes."

With the dramatic shift in Trump's tariff policy, Wall Street analysts have been forced to quickly revise their stock market and economic forecasts, showing unprecedented frequency of changes.

Just a month ago, due to Trump's initiation of a tariff war globally that triggered a stock market sell-off, Wall Street strategists were rapidly downgrading their forecasts for the S&P 500 index and the U.S. economy.

But this week, the "tide has turned"—the Trump administration changed direction and recently even reached a temporary agreement with China to reduce tariffs on both sides. This forced the same group of strategists to make a 180-degree turn in their predictions.

Ed Yardeni, a senior expert on Wall Street and founder of Yardeni Research, commented:

"This has indeed been a crazy journey. I rarely change my forecasts, but this time I told my clients that I reserve the right to change my predictions based on the frequency with which the president changes his mind."

JP Morgan and Goldman Sachs Both Withdraw Recession Predictions

Michael Feroli, chief economist at JP Morgan, announced yesterday that he is abandoning the recession forecast he made a month ago.

After the U.S. and China reached an important consensus in the economic and trade field, Feroli overnight "revised his report," raising the full-year GDP growth forecast from 0.2% to 0.6%, and lowering the recession risk assessment to "far below 50%," while postponing the first interest rate cut expectation from September to December.

Ironically, this is not the first time Feroli has "misjudged" an economic recession. At the end of 2023, Feroli predicted a recession, but as the stock market soared, he had to publish a report titled "The Apocalypse Is Not Near" at the end of the year.

Previously, Goldman Sachs had a similar situation. On the afternoon of April 9, Goldman Sachs chief economist Jan Hatzius released a report predicting that "the U.S. is heading into a recession."

However, just 20 minutes after the report was released, Trump announced on social media a 90-day tariff suspension for certain countries, forcing Goldman Sachs to retract its recession prediction, raise its U.S. growth expectations, and postpone its interest rate cut expectations, all within just 73 minutes of the first report's release.

Not only economists but also stock strategists are quickly adjusting their expectations.

Goldman Sachs chief equity strategist David Kostin, after downgrading the S&P forecast a month ago, is now chasing upward momentum again.

In the latest research report, Kostin raised his 3-month and 12-month return forecasts to +1% and +11%, corresponding to index levels of 5900 points and 6500 points (previously forecasted at 5700 points and 6200 points) The six-month return forecast for the end of 2025 is +4%, corresponding to an index level of 6100 points (previously forecasted at 5900 points).

According to media reports, Ed Yardeni has also raised the S&P year-end target from 6000 points to 6500 points, believing that the financial markets are forcing Trump to make concessions.

Previously, he had lowered his expectations twice within a month, believing that tariff policies increased the risk of economic recession.

Trump's erratic policies make predictions nearly impossible

The frequent changes in these forecasts highlight how Wall Street's predictions are almost swayed by the Trump administration.

Michael O'Rourke, Chief Market Strategist at JonesTrading, stated:

“Price targets are often taken too literally. Clearly, no one can read the president's mind, and his frequent 180-degree turns make it dangerous to predict based on policy.”

Some media pointed out two months ago that any "negotiation" by Trump means that potential conditions will reflexively continue to change with the negotiation process, which is why predicting any outcome during Trump's negotiations is a practice destined to ruin one's reputation.

The market seems to have digested the worst-case scenario

Although strategists' predictions are chaotic, stock market investors currently seem to be enjoying the upward trend.

On Tuesday, the S&P 500 index erased all losses for the year, and the overnight release of moderate CPI inflation data also helped boost market sentiment.

Interestingly, despite the strong market rebound, institutional positioning shows a different situation.

Reports indicate that hedge fund positions remain net sellers, leverage is close to historical lows, and sentiment remains subdued. Analysts suggest that given so much skepticism, if this rebound truly has momentum, the market could see a stronger rally