One of Wall Street’s Biggest Bulls Slashes View as Tariffs Bite

The year 2025 has emerged as a watershed moment for global markets, with Wall Street analysts suddenly turning cautious—and even fearful—as President Trump’s aggressive tariff policies upended economic stability. Once-optimistic strategists, including some of the Street’s most bullish voices, have slashed their forecasts for the S&P 500, citing the unprecedented scale of trade restrictions and their cascading effects on corporate profits, inflation, and investor confidence.

The Downgrade Tsunami

The most dramatic revisions have come from firms like JPMorgan Chase, which became the most bearish of all, cutting its year-end S&P 500 target to 5,200 from 6,500—a 20% drop. Bank of America and Evercore ISI followed suit, trimming their forecasts to 5,600, while Oppenheimer slashed its projection to 5,950 from 6,666. Even traditionally bullish analysts like Ed Yardeni of Yardeni Research capitulated, revising his target from 7,000 to 6,000 after the tariffs were announced.

The spread between the highest and lowest forecasts tripled to 1,800 points by early 2025, with the average forecast dropping to 5,733 when excluding non-updated targets—a level 3% below the S&P 500’s start-of-year price. .

Why the Sudden Pessimism?

Analysts point to three interlocking risks:
1. Corporate Profit Erosion: Tariffs on all imports (10%) and retaliatory levies of up to 34% on China are squeezing margins. For example, a 10% tariff on imported components could reduce a manufacturer’s net income by 5–8%, assuming no price hikes.
2. Inflation Persistence: The tariffs have stalled the Fed’s fight against inflation, with core PCE prices remaining above 3% despite rate hikes.
3. Global Growth Slowdown: The IMF slashed U.S. GDP growth to 1.8% for 2025 from 2.7%, citing trade tensions as the primary drag.

Historical Context and Hidden Risks

The 2018 tariff episode offers a cautionary tale. Then, markets plunged 19.8% in Q4 before rebounding. But 2025’s tariffs are far broader—covering all imports versus targeted levies—and lack a clear “end date.” Recession fears have surged, with Barclays and Goldman Sachs assigning a 50% probability of a U.S. downturn in 2025.

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The Bulls’ Last Stand

Not all analysts have surrendered hope. Barclays and Yardeni still see modest gains, with targets of 5,900 and 6,000, respectively. These bulls argue that U.S. companies will adapt through supply chain reconfigurations or price increases, though such adjustments could take years.

Conclusion: The Tariff Tax on Growth

The data paints a stark picture: 90% of Wall Street’s revised forecasts now assume slower growth or outright declines in the S&P 500 by year-end. The average analyst’s fear is clear: tariffs have become a self-fulfilling drag on confidence, with businesses delaying investments and consumers tightening belts.

With the IMF’s growth forecast cut by nearly 33% and the S&P 500’s average target now 7% below its 2024 close, investors face a critical question: Will markets mirror 2018’s rebound, or will the broader scope of 2025’s tariffs cement a prolonged downturn? The answer hinges on one variable—tariff removal—unlikely under the current administration. For now, caution reigns.

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In sum, the tariff-driven downgrade frenzy reflects more than just market mechanics—it’s a vote of no confidence in the economic playbook of 2025. The bulls are gone. The data, for once, is the only bull left.