JPMorgan Chase Turns Bearish as US Stocks Plunge 3.4 Trillion

Several prominent Wall Street banks, including JPMorgan Chase, have abruptly shifted their forecasts for the US stock market. JPMorgan Chase’s head of global market intelligence, Andrew Tyler, announced that the lender’s trading desk is now short-term bearish on the stock market due to a deteriorating macroeconomic backdrop. This change in outlook comes as the US stock market has wiped out $3.4 trillion in value this year, erasing all gains since the 2016 presidential election.

Tyler’s team attributes this bearish stance to the ongoing trade war initiated by President Donald Trump, which they believe could limit the US economy’s growth. “With this in mind, we are changing our view to tactically bearish… Given the uncertainty, positioning, and potential for a negative feedback loop to push people to using the recession playbook, we think the bearish position makes the most sense,” Tyler stated.

Earlier this week, Trump imposed 25% tariffs on both Canada and Mexico, leading to a significant drop in the Dow Jones Industrial Average, alongside smaller declines in the Nasdaq and S&P 500. As the equity market retreats, Goldman Sachs analyst David Kostin noted in an investor note that equity valuations are not yet low enough to trigger a significant bounce. Kostin believes that the stock market will only regain bullish momentum if the US economy begins to show signs of strength.

“An improvement in the US economic growth outlook will be required to fully reverse the recent equity market weakness,” Kostin said. He also forecasted that equity returns this year will be more modest than last year and will match the trajectory of earnings growth. Meanwhile, Morgan Stanley believes that the stock market will see “muted” gains this year. Andrew Slimmon, the firm’s head of applied equity advisors team, noted that stocks have been in a bull market since 2023, leading to concerns that the market may be overvalued.

Slimmon also pointed out that the third year of an equities bull market typically prints mediocre gains on average based on historical data. “With enough negatives out there, including higher-for-longer interest rates and geopolitical noise, to cause a subpar year, the recently minted optimists could revert to being skeptics, only to have the market roar again in 2026. In that case, 2025 could be