In a sharp turnaround from the bullish outlook at the start of 2025, top Wall Street strategists are reassessing their year-end projections for the S&P 500 as market uncertainty intensifies. Amid rising concerns over President Donald Trump’s evolving tariff policies and retaliatory measures from global trading partners, financial markets have been thrown into a state of heightened volatility.
Revised S&P 500 Targets Reflect Caution
Several major investment firms have recently adjusted their forecasts, with Goldman Sachs and Yardeni Research being the latest to lower their year-end targets. Goldman Sachs cut its projection to 6,200 from 6,500, citing economic pressures from tariffs and overall political instability. Meanwhile, Yardeni Research slashed its best-case scenario target to 6,400 from 7,000, pointing to potential stagflationary effects under the current administration.
Despite these revisions, the average Wall Street target remains at 6,607, implying a potential 17% gain from the S&P 500’s latest close of 5,638.94. This marks a slight downgrade from the 6,667 average target at the beginning of the year. Firms such as Deutsche Bank, Oppenheimer, and Société Générale have maintained their optimistic projections, keeping their targets at 7,000 or above.
| Wall Street Firm | 2025 S&P 500 Target (Dec 2024) | 2025 S&P 500 Target (March 14, 2025) |
|---|---|---|
| Oppenheimer Asset Management | 7,100 | 7,100 |
| Deutsche Bank | 7,000 | 7,000 |
| Société Générale | 6,750 | 6,750 |
| BMO Capital Markets | 6,700 | 6,700 |
| Goldman Sachs | 6,500 | 6,200 |
| Yardeni Research | 7,000 | 6,400 |
Market Correction and Investor Sentiment
The S&P 500 has dropped 4.2% year-to-date, while the Nasdaq has suffered an 8.1% decline, and the Dow Jones Industrial Average is down 2.5%, according to FactSet data. While Wall Street initially expected a pro-growth policy approach from Trump’s second term, the focus has remained on tariffs, immigration restrictions, and reducing the federal government’s size, leaving investors uncertain about future economic conditions.
Strategists at RBC Capital Markets have held their 6,600 target but acknowledge that the market could experience a pullback of up to 20%, potentially bringing the index down to 5,775 before rebounding. Similarly, J.P. Morgan has stuck with its 6,500 projection but warns that the market’s recovery to this level could extend into 2026 rather than year-end 2025.
Consensus Forecasts Often Lag Market Movements
Historically, Wall Street’s consensus projections tend to lag actual market movements by approximately three months, according to Piper Sandler. Michael Kantrowitz, the firm’s chief investment strategist, noted that forecasters often adjust their targets reactively rather than proactively, especially when market conditions change rapidly. This trend has been evident in 2025, as strategists gradually shift their outlooks in response to declining stock prices and economic uncertainty.
Greg Halter, director of research at Carnegie Investment Counsel, pointed out that Wall Street’s valuation models rely heavily on estimated earnings per share (EPS) and forward price-to-earnings (P/E) ratios. While EPS projections for the S&P 500 have remained stable at around $271.05 for the full year, the forward P/E ratio has fallen from 21.6 in January to 19.9 as of mid-March, according to FactSet.
Stock Market Resilience Amid Corrections
Despite the recent correction, U.S. stocks managed a strong rally on Friday, with the S&P 500 climbing 2.1%, the Nasdaq jumping 2.6%, and the Dow surging over 670 points, or 1.7%. However, both the S&P 500 and Nasdaq remain on track for their fourth consecutive week of losses, reflecting continued investor uncertainty.
While bearish sentiment among individual investors has increased—a contrarian indicator that often signals a market bottom—Wall Street strategists remain cautious. With key policy announcements on the horizon and potential shifts in economic direction, investors are closely monitoring signals from Washington and global markets to gauge the next move for the S&P 500.
