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Wall Street banks have slashed their targets for the main US share gauge over the past fortnight, as fears grow over the potential economic fallout from President Donald Trump’s trade war.

At least 10 banks, including JPMorgan, Bank of America and Evercore ISI, have cut their estimates for the S&P 500 index in the weeks since Trump’s decision to impose a baseline duty of 10 per cent on most US imports and higher “reciprocal tariffs” sent shockwaves through financial markets.

The S&P 500 has fallen more than 7 per cent in highly volatile trading since the initial levies were announced on April 2, and 14 per cent since touching a record high on February 19. Trump has since paused the reciprocal tariffs and created a carve-out for smartphones and some other electronics.

But economists say the uncertainty caused by rapid U-turns in trade policy could still slow economic growth, or even trigger a recession — something that would hit the earnings of listed US companies.

“The goldilocks sentiment in place entering this year has given way to abject uncertainty,” said Citigroup analyst Scott Chronert in a note.

Wall Street’s average end of year S&P 500 target now stands at 6,012 — compared with 6,539 at the end of last year. The S&P 500 finished this week at 5,283.

The new forecasts mean that, despite growing worries about slowing economic growth, strategists nevertheless expect the index to rise 14 per cent over the coming months. It would mark a gain of just 2 per cent for 2025, a major slowdown from the back-to-back rallies of more than 20 per cent in 2023 and 2024.

The Banks’ newly cautious tone marks a humbling reversal since the start of the year, when many market participants had expected lower taxes and lighter regulation under a Republican administration to boost corporate profits.

Citigroup on Friday said it expects the S&P 500 to end the year at 5,800, down from a previous call of 6,500. The bank also lowered its 2025 earnings per share estimate to $255 from $270, just below the average forecast of $262, Bloomberg data shows.

Chronert said the recent sharp fall for US equities may become “the first bear market specifically triggered by US presidential actions”.

JPMorgan lowered its “base case” target on April 7 to 5,200 from 6,500, assuming “partial” relief on tariffs. “Even though we do not believe US exceptionalism is over,” the bank wrote at the time, “this [liberation day] shock came at a time when valuation was rich, positioning was crowded and leadership was particularly narrow.”

Peter Berezin at BCA Research, who has the lowest 2025 price target for the S&P 500 among analysts surveyed by Bloomberg, said in mid-February that he expects the index to close out this year at about 4,450, implying a drop of 15 per cent from current levels. In early March he said a US recession was likely to begin within the next three months.

“There’s a lot of groupthink on Wall Street,” said Berezin.

DULLES, Va. – Maryland Democratic Sen. Chris Van Hollen flew into Dulles Airport on Friday after visiting a wrongly deported man in El Salvador. The senator says he learned that the Trump administration struck a $15 million deal with the Central American nation to take deportees from the United States.

According to Van Hollen, Abrego Garcia been moved to a new detention facility in El Salvador. He says Abrego Garcia says he is well and that his family is keeping him motivated to keep going. 

But a major development came out of Van Hollen’s visit to El Salvador. 

The senator reported — for the first time — that he believes there is a $15 million deal between the United States government and El Salvador related to the detention facility where Abrego Garcia and many other deportees from the U.S. were being held. 

Van Hollen says he plans to investigate the use of taxpayer dollars in that deal as he continues to fight for Abrego Garcia’s return.

Dig deeper:

According to Van Hollen, Abrego Garcia asked for a phone call when he was placed in a Maryland detention facility but was denied. Then he was transferred to a facility in Texas before being put on a plane handcuffed, shackled, and he could not see out the window and did not know where he was going.  

Abrego Garcia says he has been traumatized by being at the detention center but he was recently moved to a new facility with better conditions.

Abrego Garcia told Van Hollen that he is not afraid of the other men in his immediate detention cell but he is fearful of other prisoners in the facility who called out to him and taunted him. 

The reason an immigration judge ruled in 2019 that he could not be deported to El Salvador was because he demonstrated a credible fear of persecution if he returned.

“An immigration judge found years ago that it would put his life in danger if he was returned to El Salvador,” Van Hollen said. “He was given protective status and a work permit.”
 

The other side:

Meanwhile, the White House continues to assert that he will not return to the United States.

Following Abrego Garcia’s deportation back in March, the Trump administration admitted that sending him back to El Salvador was an “error” but they won’t do anything to bring him back, even after a Supreme Court ruled that they should facilitate his return. 

READ MORE: Trump administration says US can’t force return of man mistakenly deported to El Salvador

Both Trump and El Salvador’s President Nayib Bukele maintain that they have no plans to bring Abrego Garcia back.

The Trump administration has repeatedly claimed Abrego Garcia is a criminal and a member of the violent MS-13 gang, but has yet to provide direct evidence of those claims. 

The White House also insists Abrego Garcia was in the states illegally, despite the 2019 court ruling determining he should not be deported.