Wall Street strategist Tom DeMark forecasts drop in S&P 500 index

On April 2, the S&P 500 surged by double digits after President Trump announced new import tariffs targeting major trading partners. However, by April 9, TheStreet reported that the administration had temporarily suspended most of these trade duties.

The sharp increase in the index occurred despite data showing an economic slowdown in the US. The stocks have now retreated to their early April levels.

Wall Street veteran Tom DeMark suggests that the US Federal Reserve (Fed) faces a challenging year ahead. The central bank must balance its dual mission of controlling inflation while maintaining low unemployment—objectives that often conflict. While raising interest rates could curb inflation, it may also slow economic growth and trigger job losses.

DeMark warns that the S&P 500 currently sits in a vulnerable position. Shifts in global trade dynamics could drive the index down to 4,835, which would represent a 20% decline from February's peak and establish dominant bearish market sentiment.