Cantor Fitzgerald Warns of 3-9 Month Market Downturn Amid Economic Challenges

Cantor Fitzgerald has maintained a bearish outlook on the U.S. stock market, cautioning that the recent rebound, primarily driven by investor positions, may have reached its peak. The firm anticipates significant economic and corporate challenges in the next three to nine months, citing multiple adverse factors that could lead to a market downturn.

The primary concerns include inflationary pressures from tariffs, a decline in consumer and corporate spending following an earlier surge in demand, and increasing uncertainty impacting hiring and capital investment. Additionally, government layoffs are beginning to reflect in employment data, while persistent supply chain disruptions continue to strain economic output.

Cantor Fitzgerald expects corporate earnings forecasts to continue declining, and bond market risks to rise, particularly in light of the anticipated impact of the upcoming budget reconciliation legislation. The firm also warns that stock valuations have reached unsustainable levels, especially given the current economic backdrop. Crucially, the investment firm notes that policymakers are unlikely to provide fiscal or monetary policy support unless the situation significantly deteriorates.

The firm's analysis suggests that the current market conditions are not conducive to a sustained recovery, and investors should prepare for a challenging environment in the coming months. The report emphasizes the need for caution, as the market may face a series of obstacles that could hinder further gains.