Wall Street Slashes U.S. Stock Market Targets by Over 7%, Outpacing COVID-Era Downgrades

Wall Street Strategists Cut S&P 500 Year-End Forecasts by 7.5%
Downward Revisions Outpace Early COVID-19 Pandemic Adjustments
Optimism Remains Despite Sharp Market Decline
JPMorgan Chase Makes Largest Cut; Wells Fargo Offers Most Bullish Outlook

Leading equity strategists on Wall Street are revising their year-end forecasts for the U.S. stock market downward at a steeper pace than during the early phase of the COVID-19 pandemic.

According to Bloomberg News on the 17th (local time), the average year-end S&P 500 index forecast from 21 surveyed strategists has dropped by 7.5%, from 6,539 to 6,047. This decline is larger than the 5% downward revision to the average year-end forecast between the February and March 2020 peaks, when stock prices plummeted due to the impact of the COVID-19 pandemic.

However, the current average forecast from strategists remains about 14% higher than the closing price on the 17th. This indicates that, despite the recent sharp market downturn, an optimistic outlook still prevails. On the previous day, the S&P 500 index, which is focused on large-cap stocks, closed at 5,282.7, down 0.13% on the New York Stock Exchange.

Out of the 21 strategists, 13 lowered their forecasts. Dubravko Lakos-Bujas of JPMorgan Chase made the largest cut, lowering his forecast by 20% and projecting 5,200 for the year-end, which is the lowest among the respondents. In addition, teams from Evercore ISI, Oppenheimer & Co., Bank of America, and Ned Davis Research each reduced their forecasts by more than 15%.

On the other hand, Chris Harvey of Wells Fargo gave the most optimistic outlook, forecasting the S&P 500 at 7,007 by year-end. Binky Chadha of Deutsche Bank also projected a year-end level of 7,000.