26 March 2025 | S&P 500

European banks warn of underestimated risks to US stock market

European banks warn of underestimated risks to US stock market

Strategists at UBS Group AG and HSBC Holdings Plc expressed concerns about the US stock market, warning of a possible decline in the S&P 500 by 8% to 5,300. Their American counterparts at JPMorgan Chase & Co. and Morgan Stanley remain optimistic, considering the general drop in prices to be over.

European experts point in their forecasts to the deteriorating indicators of US economic activity. As consumer confidence declines to a four-year low, they emphasize the negative impact of trade conflicts. HSBC strategists note that there is little chance that trade tensions will be resolved quickly, even after April.

Contrary to their European counterparts, American financial institutions are overly optimistic. JPMorgan and Morgan Stanley consider the current market decline a temporary correction, assuming that the worst is already over. They do not take into account the potential long-term risks related to the response of other countries to escalating trade tensions. Given the economic uncertainty, such a position seems risky for investors, European experts state.

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