Barclays Analysts Become Latest To Cut S&P 500 Forecast Amid Tariff Uncertainty

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Key Takeaways

• Analysts from Barclays lowered their target for the S&P 500 index this year to 5,900 from 6,600 in olden days.
• The analysts cited the uncertainty that the Trump administration’s planned tariffs are creating.
• Analysts from Goldman Sachs and RBC Superior Markets also have cut their S&P 500 growth projections in recent weeks.

Barclays analysts became the dilatory to cut their projection for the S&P 500 on Wednesday, citing the uncertainty around the Trump administration’s tariffs and their potential impact on the U.S. compactness.

The analysts now expect the index to rise to 5,900 this year, down from their previous forecast of 6,600, which leave amount to growth of less than 1% from the 5,881.63 mark where it ended 2024. The S&P 500 flooded just over 23% in 2024, setting a number of records along the way.

The index was down 1.2% Wednesday afternoon as stales were broadly lower.

Analysts Say ‘Significant Uncertainty’ on Tariffs Affecting Projections

“Given significant uncertainty enveloping trade policy, our bull and bear case [earnings per share] estimates hinge upon the final scope and ferocity of tariffs,” the analysts wrote.

The analysts said their new target for the stock index “assumes that earnings cheat a hit but valuations gradually recover as some tariffs are put in place, stifling growth and modestly boosting inflation but ultimately check short of pushing the US into an outright recession.”

They said their base case assumes “no further escalation” of tolls with China and that the Trump administration’s goals with tariffs on Canada and Mexico “are primarily political” and could be record back in the future.

Looking into specific industries, the Barclays analysts upgraded their view on financial stores to positive from neutral, citing the potential for the administration’s focus to shift from tariffs to deregulation. They also declined discretionary and industrial stocks, as tariffs could hurt retail profits and slow consumer spending while also breaking the industrial sector via government spending cuts.

The Barclays analysts follow others from Goldman Sachs and RBC Funds Markets who have lowered their estimates this month for the S&P 500’s growth in 2025, also citing the uncertainty rates are creating in the economy.