JPMorgan analysts warned in a note to clients this week that the U.S. stock market faces a steep loss by year's end amid a number of economic headwinds.
The U.S. stock market soared to a new record high over the past week, but there may still be trouble on the horizon, according to JPMorgan analysts. The forecast from JPMorgan's chief market strategist Marko Kolanovic is one of the most pessimistic on Wall Street. He and his peers see the S&P 500 ending the year at 4,200 — the lowest year-end target among major Wall Street banks. From current levels, that implies a more than 21% drop.
Stocks have notched record highs over the past week, with the Dow Jones Industrial Average topping 40,000 for the first time ever, while the S&P 500 climbed past 5,300. The indexes were little changed on Wednesday as investors awaited earnings from Nvidia and meeting minutes from the Federal Reserve that could shed light on the timing of interest rate cuts.
But Kolanovic suggested the gains are unlikely to last, with interest rates likely to remain in restrictive territory for longer amid signs of stubborn inflation, evidence of weakness among lower-income consumers and growing geopolitical uncertainty. A boost from artificial intelligence is unlikely to offset the other risks, he warned.
The gloomy forecast comes after a volatile year for the stock market. All three indexes tumbled in mid-2023 amid fears the Federal Reserve would raise interest rates higher than previously expected — and hold them at peak levels for longer. But they have recouped those losses and more, with the S&P 500 up more than 29% since it hit bottom at the end of October. Since the start of the year, the benchmark index is up about 11.5%, while the Dow Jones Industrial Average has climbed 5.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Morgan Stanley throws in the towel: S&P 500 price target raised by 20%Morgan Stanley throws in the towel: S&P 500 price target raised by 20%
Read more »
JPMorgan is worried about further S&P 500 sell-off potentialJPMorgan is worried about further S&P 500 sell-off potential
Read more »
S&P 500 rally not expected to accelerate from current levels: JPMorganS&P 500 rally not expected to accelerate from current levels: JPMorgan
Read more »
WNBA star Brittney Griner opens up about harrowing Russian detention in exclusive '20/20' specialThe WNBA star shared her story in an exclusive interview with Robin Roberts.
Read more »
20 Of The Best Reddit Posts From This Week (13-20 April)'There was fake blood everywhere and someone had called an ambulance. Which was good, because we ended up needing it for my mum.'
Read more »
WNBA star Brittney Griner opens up about harrowing Russian detention in exclusive '20/20' special'I was just so scared for everything because there's so much unknown,' Griner told 'GMA' co-anchor Robin Roberts.
Read more »