US stocks have struggled to find support after President Trump announced on April 2, and punitive tariffs against dozens of nations.
The financial markets around the globe are reacting negatively towards Trump’s new tariffs, as the disruption of the global supply chains could cause a recession.
The S&P 500 index has fallen by 17% as a result of Trump’s policies on trade. However, the index may still fall further over the next few months.
S&P could fall further, to a level of 4,850
Carter Braxton Worth is the CEO and founder of Worth Charting. According to him, an in-depth analysis of the SPX graph suggests that US stocks are not yet finished tumbling.
Worth’s recent report warned that benchmark indexes could fall further, possibly to 4,850, indicating a possible decline of 5.0%.
Worth believes that the 4,850-level will serve as an important support, as it is in line with the post-COVID-19 market peak of 2021. It also coincides to the uptrend in the markets since the pandemic-low in 2020.
The market expert wrote that “our work continues to indicate that the market will be heading down to 2021’s peak/5-year trendsline” last week.
The SPX target continues to be lowered by strategists for the year end
Trump’s tariffs caused several strategists to lower their targets for S&P 500 year-end in 2025. The latest is Lori Calvasina, of RBC Capital Markets.
Calvasina said that she was influenced by the continued insecurity coming from the White House when, last week, she reduced her target for the year’s end on the benchmark Index to an all-time low of 5,550.
She told her clients recently that “with this move, we have changed our bear case” for this index. Calvasina expects SPX earnings will be limited to $258, down from $264 in her earlier forecast.
RBC’s latest target indicates that the S&P 500 price will finish this year at a level more than 5,0% lower than the starting point of 2025.
Tariffs in retaliation are also hurting US stock
China is among the countries that have announced retaliatory tariffs on American products in response to Trump’s new tariffs.
Beijing announced last week that all US imports from April 10 to April 30 will be subjected to new tariffs of 34%. This could be devastating for many American companies with significant exposure to China.
Apple, Nvidia and other titans are heavily dependent on China to grow their top line. This is why US stocks have been crashing in the midst of the trade war.
Analysts at Oppenheimer still believe that SPX will surpass the 7,000 mark this year. This would indicate a possible upside of more than 35%.
As updates are released, this post-Trade war may push S&P500 down to a lower level.
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