The S&P 500 (SPX) has surged nearly 30% since cementing a low on April 8 as fears over President Trump’s tariffs peaked. For context, the benchmark index has returned an average of 10.33% per year since 1957, according to Investopedia.
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However, more than half of the gains since April could be at risk of being erased, according to investment firm Evercore ISI.
Evercore has a year-end price target of 5,600 and warns that the benchmark index could fall between 7% and 15% in the coming months. Its price target implies downside of 11% from Tuesday’s closing price of 6,299.10.
Evercore Warns of FOMO and Froth
“FOMO has begun,” wrote Evercore chief equity strategist Julian Emanuel in a note to clients. “Stocks have overdiscounted the potential for continued good news.” Emanuel added that any positive developments on the tariff front have “arguably” been priced into the market.
Evercore and Emanuel aren’t alone. Morgan Stanley believes that the SPX could drop as much as 10% as consumers begin to feel the effects of higher prices from tariffs. Deutsche Bank adds that a market pullback is overdue following three months of strong returns.
The S&P 500 has returned 7.10% year-to-date.
