At the end of 2024, the bull market was all set to keep roaring with the “Trump Bump” keeping the economy going strong in 2025. Wall Street strategists were almost universally predicting another year with 10% gains in stocks. Zooming forward to the end of Q1-2025 and the scenario looked different with the S&P 500 down 3% and the all-powerful NASDAQ-100 down 5% year-to-date.
Wall Street strategists have begun to dial down certain growth expectations for 2025. This may not be an outright recession watch, but uncertainties around politics, tariffs, spending cuts, lower employment and weaker consumer spending are all starting to weigh on the outright bullish that Wall Street’s top strategists had just 90 days earlier.
The S&P 500 was back at 5,700 mid-week, down from its high of 6,147 — and down from the 5,881.63 mark at the end of 2024.
Oggonomics has most recently tracked a cautious outlook from Barclays for the stock market. This follows some pessimism from RBC Capital Markets and Goldman Sachs in the last two weeks.
BARCLAYS
Barclays is the latest firm to lower its S&P 500 index target this year. Barclays is now predicting that the S&P 500 will end 2025 at 5,900 versus a prior target of 6,600. The team cited its bull-bear earnings scenario around uncertainties from the Trump administration’s planned tariffs.
While Barclays warns that tariffs will stifle growth and modestly boost inflation, Barclays believes the fallout will stop short of an outright recession.
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RBC CAPITAL MARKETS
RBC Capital Markets cut its official S&P 500 price target on March 17. Its initial target of 6,600 coming into 2025 was cut down to 6,600. RBC, based in Canada, anticipates slower GDP growth, a stronger U.S. dollar, lower corporate margins/earnings and stickier inflation amid market uncertainty.
RBC’s bearish case for the S&P 500 to potentially double-digit broader market declines. That S&P 500 target was trimmed down to 5,550 from 5,775 and is based on the more cautious side of its 0.1% to 1.0% GDP growth.
GOLDMAN SACHS
Goldman Sachs had lowered its S&P 500 expectations as recently as March 12. Despite a prediction of the S&P 500 closing out 2025 at 6,500 in its annual view, Goldman Sachs now has a 6,200 benchmark for the S&P 500 this year.
In a similar note, the uncertainties around Trump’s tariffs and other economic growth issues were cited for the weakness in stocks. Goldman Sachs had also noted at the time that the prized Magnificent 7 stocks had moved from a benefit to a heavy drag on the markets as hedge funds unwinding those positions kicked in. The firm also suggested that investors should look at the stocks and areas which are insulated against the major thematic drivers causing the market volatility.
ALL IN ALL
While none of these S&P 500 price target cuts are massive, it does show that 3 very well recognized brokerage firms are not just sticking their heads in the sand and hoping for the best.
