From Yahoo Finance: 2025-04-29 16:16:00

Stocks have nearly recovered all their losses since President Trump’s April 2 tariff announcements. Wall Street strategists aren’t confident the rally will keep pushing higher. Since the stock market bottomed on April 8, the S&P 500 has risen 11.5%, the Nasdaq Composite has gained about 14.4%, and the Dow Jones Industrial Average is up about 7.7%. President Trump’s 90-day tariff delay on April 9 sparked the rally. But as stocks have drifted higher since then, equity strategists have pointed out that the market narrative hasn’t changed much. Uncertainty around tariff policy remains rampant. The outlook for corporate earnings is still muddled. Economists argue the possibility of a US recession has been rising. This could mean stocks don’t have much more upside until another catalyst emerges. Morgan Stanley chief investment officer Mike Wilson sees the S&P 500 trading in a range of 5,000 to 5,500 in the near term. Wilson believes a tariff deal with China that “materially” brings down the effective tariff rate could be what is needed to push the benchmark index above 5,500 for a sustained period. Interest rate cuts from the Federal Reserve and upward revisions to earnings could also power stocks higher. “Until we see clearer risk-on shifts in these factors, range trading is likely to continue.” After two years of debating how much higher the bull market could run, equity strategists now believe the risks in the stock market are likely to the downside. On Tuesday, HSBC became the 12th Wall Street research team tracked by Yahoo Finance to cut its S&P 500 year-end target since the start of Trump’s trade war. Five of those firms see the S&P 500 ending the year essentially flat from current levels or lower. HSBC head of Americas equity strategy Nicole Inui cut her S&P 500 year-end target to 5,600 from a prior forecast of 6,700. Inui recommended clients position their portfolios “defensively” amid the risks of higher inflation, slower growth, and possibly a recession.

Read more: Why Wall Street is wary of the stock market rally