With the US President's trade tariffs looming, strategists at major investment banks are revising their forecasts for the American stock market. David Kostin from Goldman Sachs updated his year-end estimate for the S&P 500 index, lowering it to 5,700. This is the second revision since early March and suggests only a modest 2% gain from current levels.
Other financial analysts are also being cautious. Experts at RBC Capital Markets believe that 5,500 is a critical support level for the S&P 500. Breaching this level could lead to a 20% index fall from its February highs, they warn.
Analysts highlight that the US President's protectionist measures are having a negative impact on the market. As they lower their forecasts, specialists are factoring in the recession risk and advising investors to hold off on making significant moves until economic conditions improve.
Morgan Stanley's Michael Wilson suggests that the tariffs are not the end of the US trade policy revision process, but rather a step towards it.