S&P 500 Forecasts Slashed: RBC & Wells Fargo Issue Warnings on Trade Policies

Market uncertainty is rising due to President Donald Trump’s trade policies, particularly newly imposed tariffs, prompting analysts to revise equity outlooks.

Consequently, RBC Capital Markets and Wells Fargo Investment Institute have lowered their year-end S&P 500 projections, citing anticipated negative impacts from the administration’s tariff measures on the economy and corporate performance.

RBC’s Revised Outlook

RBC Capital Markets, led by strategist Lori Calvasina, cut its S&P 500 target sharply to 5,500 points from a previous 6,200. This revised target currently represents the lowest projection among major Wall Street strategists. This adjustment implies a potential index decline heading into 2025, shifting from prior growth expectations. The firm also lowered its S&P 500 earnings per share (EPS) estimate for the current year to $258. Calvasina indicated that their former pessimistic scenario has essentially become the new base case owing to the challenging trade environment, particularly concerning tensions with China and other partners.

Wells Fargo Adjusts Forecast

Similarly, Wells Fargo Investment Institute reduced its S&P 500 target, setting it now at 6,000 points, down from a prior 6,600 points. The institution stated that the implemented tariffs are expected to weigh on consumer spending and corporate profit margins, while potentially contributing to inflationary pressures. These factors, they noted, could exacerbate an economic slowdown trend that was already being observed. In line with this cautious view, Wells Fargo also trimmed its S&P 500 EPS forecast, setting it at $260 per share.