- Wall Street trading desks, including Goldman Sachs (GS) and Bank of America (BAC), predict President Trump’s Wednesday tariff announcement will increase S&P 500 (^GSPC) volatility and worsen its 8%-plus drop from Feb. 19, with potential declines to 5,500 or 5,400 if 20% tariffs are imposed, per Bloomberg News.
- Concerns mount that tariffs could harm corporate earnings and supply chains, with Tuesday’s data showing U.S. factory activity contracting in March, shifting sentiment from post-election optimism to fears of economic uncertainty.
- Analysts like Barclays’ Alexander Altmann and UBS’s Michael Romano highlight policy vagueness as a market killer, while strategists who forecast a 6,600 year-end S&P 500 now see a tougher near term but expect a recovery later in 2025
Wall Street’s trading desks are sounding the alarm as President Donald Trump’s upcoming tariff announcement on Wednesday threatens to shake up the S&P 500 (^GSPC), which has already slid 8.3% from its February 19 peak. According to a Bloomberg News report firms like Goldman Sachs (GS), Bank of America (BAC), and JPMorgan Chase (JPM) are bracing for a bumpy ride, predicting that the sweeping levies on all U.S. trading partners could spike volatility and drag the index, now hovering around 5,633, even lower. The report highlights Goldman’s March 28 note, which pointed to a sharp rise in bearish sentiment among traders and clients, with this week’s expected volatility rivaling that of the U.S. election in November. Meanwhile, BofA’s John Tully projects a potential drop below 5,500, while UBS cautions that a 20% tariff impact could drive the index down to 5,400. The concern is that tariffs could squeeze corporate profits and snarl supply chains, a fear amplified by Tuesday’s data showing U.S. factory activity shrinking in March for the first time this year amid rising prices.
The mood has shifted dramatically from the post-election optimism that drove stocks higher, when investors shrugged off tariff talk as mere bargaining bluster, cheering Trump’s tax and deregulation promises instead. Now, trading desks see uncertainty as the real threat, with Barclays’ Alexander Altmann telling Bloomberg that vague policy details could paralyze investment and confidence across businesses and consumers. JPMorgan’s desk remains tactically bearish, citing the economic ripples of trade unpredictability, while UBS’s Michael Romano notes a “violent tail” of possible outcomes, with a worrying lean toward sharp declines. Sell-side strategists, who once eyed a 6,600 year-end S&P 500 target, are backtracking—three top bulls now admit their forecasts were too rosy, though they still expect a rebound over the next three quarters of 2025. For now, Wall Street’s consensus is clear: Trump’s trade moves could deepen the market’s worst quarter since 2022, testing resilience in an already jittery economic landscape.
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