Major Wall Street banks are suddenly turning pessimistic about the US stock market. This comes after a massive $3.4 trillion loss in market value this year—erasing all gains since the 2016 election.
JPMorgan Chase Turns Bearish
JPMorgan Chase’s global market intelligence head, Andrew Tyler, says their trading desk is now betting against short-term stock market gains. He blames President Trump’s trade wars for hindering economic growth. Tyler explains that the uncertainty and potential for a recession make a bearish stance the most logical.
Goldman Sachs and Morgan Stanley Weigh In
Goldman Sachs analyst David Kostin agrees that the market isn’t cheap enough for a major rebound. He believes a stronger US economy is needed to reverse the recent downturn. Kostin predicts more modest stock returns this year, matching earnings growth.
Morgan Stanley also anticipates muted gains. Andrew Slimmon, head of their applied equity advisors team, points out that the market has been in a bull run since 2023, raising concerns about overvaluation. He notes that historically, the third year of a bull market often sees average returns. Slimmon suggests 2025 might be a temporary pause rather than a major crash.
A Shift From Past Predictions
It’s a significant change from last year’s predictions. JPMorgan, Goldman Sachs, and Morgan Stanley previously forecast the S&P 500 reaching a record high of 6,500 points in 2025, expecting a positive economic climate under President Trump. Now, the outlook is considerably more cautious.
Disclaimer: This information is for general knowledge and does not constitute financial advice. Always conduct your own research before making investment decisions.
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