Amid uncertainty over President Donald Trump’s tariff policies, which have recently triggered a correction in the New York stock market, Wall Street is showing signs of lowering expectations for key stock indices.

According to financial news outlet MarketWatch on the 15th, at least two major Wall Street firms, Goldman Sachs and Yardeni Research, have recently downgraded their year-end S&P 500 targets. Goldman Sachs reduced its target from 6,500 to 6,200 on the 12th, while Yardeni Research lowered its forecast from 7,000 to 6,400 on the 13th. Among the 15 major financial institutions tracked by MarketWatch for S&P 500 targets, these are the first to cut their forecasts compared to last year-end. The average target has slightly declined from 6,667 to 6,607.

The New York stock market initially rallied after Trump’s election, driven by expectations of tax cuts and deregulation. However, recent uncertainties and recession fears stemming from his sweeping tariff policies have led to a downturn. The S&P 500 fell more than 10% from its all-time high on the 13th, entering correction territory, before rebounding by 177.42 points (2.13%) on the 14th to close at 5,638.94. Still, it remains about 8% below its peak. Even institutions not immediately adjusting their S&P 500 targets are adopting a more cautious stance.

Lori Calvasina of RBC Capital Markets maintained a year-end S&P 500 target of 6,600 on the 11th but noted an increasing likelihood of a bearish scenario (target of 5,775). “There isn’t enough evidence yet to shift to a bearish outlook,” she said, adding, “but we’re looking for it, and the U.S. stock market is at a critical juncture.”

Strategists like Dubravko Lakos-Bujas of JPMorgan Chase have stuck to an S&P 500 target of 6,500 but recently cautioned that “this forecast has a large margin of error, and the index may not reach this level by 2026.” Citigroup, while keeping its target at 6,500, downgraded its stance on U.S. stocks from “overweight” to “neutral.”

Piper Sandler’s Chief Investment Officer Michael Kantrowitz pointed out that Wall Street’s S&P 500 target data typically lags actual stock prices by about three months (60 trading days).

Bloomberg reported that Wall Street firms are also lowering expectations for the earnings of S&P 500 companies, suggesting that market volatility could increase in the future. While the overall earnings outlook remains robust, analysts are continuously revising down their 12-month forward earnings estimates for these companies. According to Bloomberg Intelligence, over the past 23 weeks, S&P 500 companies’ profit forecasts were downgraded in 22 instances.

With U.S. companies set to begin reporting first-quarter earnings next month on the 11th, Eric Beiley of asset management firm Steward Partners remarked, “Cracks are starting to appear in the earnings outlook.”

Indeed, as the New York stock market continues its downward trend, 73% of the stocks in the Standard & Poor’s (S&P) 500 index have already entered correction territory. The benchmark S&P 500 saw a sharp drop on the 10th, followed by further declines on the 11th, bringing it to about 9% below its 52-week high set on the 19th of last month. In technical market analysis, a decline of 10% from a recent peak is typically considered a “correction.” If the index falls just 1% more, it will join the Nasdaq in officially entering correction territory.

Looking at individual stocks, 366 out of the 500 stocks in the S&P 500—73%—have dropped 10% or more from their 52-week highs, meaning the majority are in correction territory. Additionally, 203 stocks have fallen 20% or more from their peaks, placing them in “bear market” territory.

By sector, five of the S&P 500’s 11 industry groups have entered correction territory: consumer discretionary, technology, communication services, materials, and energy.

Yonhap