US stocks are struggling to find a floor after President Trump announced retaliatory, or what some would call punitive, tariffs on dozens of countries on April 2nd.
Financial markets from all over the world are reacting negatively to Trump’s tariffs as the related disruption to the global supply chain could lead to a broad-based recession.
While the S&P 500 has already tanked some 17% due to Trump’s trade policies, there’s reason to tread with caution still, as the benchmark index could lose further in the months ahead.
S&P 500 could sink further to the 4,850 level
According to Carter Braxton Worth, the founder and chief executive of Worth Charting, a deeper analysis of the SPX chart suggests that the US stocks may not be done sliding just yet.
In his recent report, Worth warned that the benchmark index could lose further to the 4,850 level, which indicates a potential downside of another 5.0% from here.
Worth expects the 4,850 level to hopefully serve as a meaningful support as it coincides with the market’s post-COVID-19 peak in 2021 – as well as the “market’s uptrend line in effect since the 2020 pandemic low.
“Our work continues to suggest that the market is headed down to the 2021 peak/5-year trendline,” the market veteran wrote last week.
Strategists continue to lower their year-end SPX targets
Trump’s tariffs have made several market strategists lower their year-end targets for the S&P 500 in 2025, the latest one being Lori Calvasina of RBC Capital Markets.
Calvasina cited continued uncertainty coming out of the White House as she trimmed her year-end target on the benchmark index last week to a Street-low of 5,550.
“With this move, our old bear case for the index this year has become our new base case,” she told clients in a recent note. Calvasina now expects SPX earnings to be capped at $258 – down from her previous call for $264.
Note that RBC’s new target suggests the S&P 500 will end this year more than 5.0% below the price at which it started 2025.
Retaliatory tariffs are hurting US stocks as well
Responding to Trump’s tariffs, a bunch of countries, including China, have started announcing retaliatory duties on American goods.
Last week, Beijing said that from April 10th, all US imports will be subject to a new 34% tariff, which could prove to be disastrous for a long list of American businesses with significant revenue exposure to China.
Even titans like Apple and Nvidia are greatly dependent on China for top-line growth, which further explains why the US stock market is crashing hard amidst the ongoing trade war.
That said, analysts at Oppenheimer continue to see SPX surpassing the 7,000 level this year, indicating a potential upside of an exceptional more than 35% from here.
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