Updated 28 May 2025 at 19:35 IST
S&P 500 to End Year Flat as Trump Tariff Uncertainty Clouds 2025 Outlook
The S&P 500 index is expected to finish the year close to its current levels, as many strategists cut their 2025 forecast for the index over uncertainty due to US President Donald Trump's tariffs.
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S&P 500 | Image:
S&P 500
The S&P 500 index is expected to finish the year close to its current levels, according to a Reuters poll, as many strategists cut their 2025 forecast for the index over uncertainty surrounding US President Donald Trump's tariffs.
On the basis of the median forecast of 51 equity strategists, analysts, brokers and portfolio managers collected from May 15-28, the year end target for the index is 5,900, down from 6,500 in a Reuters poll from February.
On Tuesday, the S&P 500 ended at 5,921.54.
What Do Analysts Say?
According to strategists, the markets will remain choppy, as 14 respondents answering a question on profit growth said S&P 500 earnings will be marginally higher in 2025 than in 2024 and two said significantly higher.
Five respondents said they would be marginally lower.
According to Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute, the firm lowered its year-end target to 6,000 recently from 6,500 set at the start of the year.
"Clearly earnings will be impacted by what's going on with tariffs," he said.
"Our belief is tariffs are a tax and some combination of U.S. consumers, U.S. companies along with international producers and companies will pay the taxes. In essence, that kind of wealth transfer comes out of earnings to a certain extent," he added.
As per LSEG, S&P 500 earnings are likely to increase 8.4% in 2025 compared with 12.1% in 2024. But the estimate for 2025 is down sharply from 14% growth estimated on January 1.
How Is The Tariff Uncertainty Impacting The Situation?
The developments on the tariff front have been highly unpredictable, especially since Trump's announcement on April 2.
In his latest move on Sunday, the US President backed down from his threat of a 50% tariff against the European Union, delaying its implementation until July 9 to allow for negotiations between the White House and the 27-nation bloc. This has prompted Brussels to fast track preparations for trade talks.
Published 28 May 2025 at 19:35 IST