Summary
⚈ Market sentiment has shifted sharply from 2024’s AI-fueled rally, with HSBC downgrading U.S. equities to ‘Underweight’.
⚈ Wall Street remains split, with forecasts ranging from JPMorgan’s bearish 5,200 to Oppenheimer’s trimmed bullish view of 5,900.
HSBC has reduced its 2025 year-end S&P 500 target by 16%, citing concerns over a possible slowdown in economic growth amid uncertainty driven by trade tariffs by President Donald Trump.
The banking giant lowered its benchmark target from 6,700 to 5,600, reflecting a more cautious stance on the index, according to an investor note published on April 29.
Currently, the index is looking to reclaim the 6,000 level, having dropped nearly 6% in 2025, closing its last session at 5,528.
Nicole Inui, HSBC’s head of equity strategy for the Americas, highlighted that the revised target accounts for “slower US growth and tariff pressure on earnings.”
The bank’s strategists also noted that “uncertainty should cap valuations given the lack of visibility to long-term earnings growth,” a more pessimistic view compared to earlier projections.
In December 2024, HSBC was much more optimistic, forecasting that the S&P 500 would reach 6,700 by the end of 2025, buoyed by expectations of high corporate earnings growth and a resilient U.S. economy.
At the time, the bank projected 9% earnings growth, supported by a slower but stable economy and margin expansion.
Back then market was also riding high from the post-election rally driven by optimism around President Trump’s election.
S&P 500 2024 impressive rally
The S&P 500, which gained nearly 28% in 2024, was fueled by mega-cap stocks, the artificial intelligence (AI) boom, and a favorable macroeconomic environment.
However, sentiment shifted in early April 2025 when HSBC downgraded U.S. risk assets, including equities, to ‘Underweight’. The bank expressed skepticism about a near-term market recovery, citing concerns over mega-cap stocks, cyclical sectors, and widening high-yield spreads.
Beyond HSBC’s pessimistic outlook, the rest of Wall Street remains divided on the S&P 500’s trajectory for 2025.
As reported by Finbold, JPMorgan issued the steepest downgrade, slashing its forecast by 20% to 5,200. The firm also outlined a worst-case scenario in which the index could fall to 4,000, signaling significant downside risk.
On the bullish end, Oppenheimer’s chief strategist, John Stoltzfus, remains the most optimistic, though he, too, trimmed his target from 7,100 to 5,900. Evercore cut its target from 6,800 to 5,800, while BofA lowered its forecast from 6,666 to 5,600.
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