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Key Takeaways
- Analysts from Barclays lowered their target for the S&P 500 index this year to 5,900 from 6,600 previously.
- The analysts cited the uncertainty that the Trump administration's planned tariffs are creating.
- Analysts from Goldman Sachs and RBC Capital Markets also have cut their S&P 500 growth projections in recent weeks.
Barclays analysts became the latest to cut their projection for the S&P 500 on Wednesday, citing the uncertainty around the Trump administration’s tariffs and their potential impact on the U.S. economy.
Analysts now expect the index will rise to 5,900 in this year. This is down from their previous prediction of 6,600. This would be a growth of less than 1 percent from the 5,881.63 level where it ended 2024. The S&P 500 surged just over 23% in 2024, setting many records along the road.
The index fell by 1.2% on Wednesday afternoon, as stocks were generally lower.
Analysts Say 'Significant Uncertainty' on Tariffs Affecting Projections
Our bull and bear case in the face of significant uncertainty surrounding trade policy [earnings per share] The analysts wrote that the estimates depend on the final extent and severity of tariffs.
Analysts said that their new target for stock index “assumes earnings take a hit, but valuations slowly recover as some tariffs put in place stifling the growth and modestly increasing inflation but ultimately stopping the US from going into an outright depression.”
They said they base case assumes that “no additional escalation” will occur in tariffs between China and the United States. They also said the Trump administration’s tariffs on Canada, Mexico and the European Union are “primarily” political and could be rolled-back at any time.
Barclays analysts, looking at specific industries, upgraded their view of financial stocks from neutral to positive, citing a potential shift in the administration’s focus from tariffs to deregulation. They also downgraded industrial and discretionary stocks as tariffs may hurt retail profits, slow consumer spending and also harm the industrial sector through government spending cuts.
The Barclays analysts follow others from Goldman Sachs and RBC Capital Markets who have lowered their estimates this month for the S&P 500’s growth in 2025, also citing the uncertainty tariffs are creating in the economy.
