Wall Street Upgrades Stocks Amid Lessened Tariff Concerns
Wall Street's optimism towards the stock market is on a roll, with analysts shifting their perspectives following the anticipated decline in tariff-related uncertainties. Barclays analysts, in particular, have become more positive, boosting their year-end S&P 500 forecast from 5,900 to 6,050.
Several other financial giants have followed suit, adjusting their targets for the index in recent weeks. Deutsche Bank, for instance, has bumped up its year-end forecast to 6,550, while UBS has raised its target to 6,000. The improved market outlook contrasts with the pessimism prevailing at the beginning of the year, when investors were hopeful about President-elect Trump's growth-oriented policy agenda.
Despite the more favorable forecasts, the S&P 500's future looks less rosy compared to the start of the year. Only two out of the major Wall Street firms have not revised their expectations for the S&P 500 this year. Barclays analysts have left their full-year earnings per share forecast unchanged at $262, a drop from $271 at the beginning of the year.
President Trump's tariffs, although delayed or diluted, are still expected to indirectly shave almost $10 off the index's EPS. Additionally, diminished consumer spending and sluggish international growth are anticipated to further suppress the index's growth by about $3. However, what-if-scenarios suggest that better-than-expected first-quarter earnings and inflation triggered by tariffs could counterbalance some headwinds.
The outlook for 2026 appears slightly brighter. Barclays expects corporate earnings growth to normalize, with tariffs' direct impact getting lost in year-over-year comparisons. Although tariffs and slow global growth will persist, they are expected to be more than offset by AI-driven growth. The firm predicts the S&P 500 to close at around 6,700 in 2026, a 12% increase from its current level.
In essence, while growth is expected to be moderate, the combination of tariff relief, strong economic data, and reduced recession risk has pushed Wall Street analysts to raise their S&P 500 earnings and price targets—with targets ranging significantly across institutions, reflecting ongoing uncertainty.
PS: Looking to manage a diversified portfolio? Check out Wealthfront's Automated Investing Account. You can start with hundreds of categories and earn a $50 deposit bonus. Try It Now!
- The optimistic stance of Wall Street analysts towards the stock market has also extended to the crypto space, withsome analysts considering the potential impact of Initial Coin Offerings (ICOs) on the future growth of crypto-finance and investing.
- In the wake of the revised S&P 500 targets, some venture capitalists are also keenly watching the development of blockchain-based token projects, which could disrupt traditional finance and investing areas such as securities trading and asset management.
- As the stock market continues to recover and grow, some investors are already looking beyond stocks and bonds, exploring alternative investments like cryptocurrencies and blockchain-based tokens as a means to diversify their portfolios and maximize returns in the long run.
