While many Wall Street strategists are racing to move their year-end targets lower as stocks sell off following Trump’s stern tariff stance, one bull isn’t wavering.
“We still firmly believe that these levies will eventually be negotiated lower,” BMO Capital Markets chief investment strategist Brian Belski wrote in a note to clients while maintaining a 6,700 year-end target for the S&P 500 (^GSPC).
Belski’s 6,700 target would represent a roughly 37% rally from current levels. Other strategists have recently become more measured in their outlooks. On Monday, Bank of America joined the likes of Oppenheimer, JPMorgan, Goldman Sachs, RBC Capital Markets, Barclays, Evercore ISI, and Yardeni Research in lowering its year-end S&P 500 forecast. The majority of those strategists now project the S&P 500 will end 2025 lower than where it began the year, just above 5,900.
Many strategists have moved their targets lower as Trump’s bevy of tariffs threaten to slow economic growth and boost inflation. The economics team at JPMorgan is now calling for a recession in the back half of 2025. Meanwhile, the team at Goldman Sachs has raised its odds of recession in the next 12 months to 45% from 35% previously.
The idea that the tariffs will spark a stock market sell-off and eventually cause a recession is one reason Belski believes Trump will eventually relent his firm tariff stance.
Read more: What Trump’s tariffs mean for the economy and your wallet
“We have always subscribed to the simple viewpoint that the market leads the economy,” Belski wrote. “So, we find it very difficult to believe that any President, let alone President Trump, would want to be viewed as being solely responsible for pushing the economy into a recession.”
After the S&P 500 fell more than 11% in two days to end last week’s trading, Belski analyzed the forward 12-month returns for the benchmark index following each sell-off of more than 10% in a two-day period. Belski found that, on average, the S&P 500 falls roughly 14% during those periods but returns more than 36% over the next 12 months.
“Unless it is going to be ‘different this time,’ the market is likely to rebound sharply from the latest levels and deliver quite impressive returns over the next year,” Belski wrote.
Belski remains Overweight on the Consumer Discretionary (XLY), Financials (XLF), and Information Technology (XLK) sectors. Since the drawdown began on Wednesday, those sectors are all down about 11% or more, underperforming the S&P 500’s roughly 10.8% decline.
