American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Risk alert: ‘mild recession’ could crash the S&P 500 to 3,700 level

by admin April 27, 2025
April 27, 2025
Risk alert: ‘mild recession’ could crash the S&P 500 to 3,700 level

The benchmark S&P 500 index has recovered nearly 10% in recent weeks after President Trump agreed to a 90-day pause on almost all tariffs other than the ones imposed on China.

Additionally, the White House exempted electronic devices from aggressive tariffs as well.

Still, if the US economy slides into a recession, as many believe it would by the end of this year, the benchmark index could crash to a low of 3,700, according to a senior analyst at Wolfe Research.

The firm’s forecast translates to about a 33% decline in SPX from current levels.

Why is Wolfe super bearish on the S&P 500 index

Wolfe analyst Chris Senyek warns of a sharp downside in the S&P 500 index even if the US sees a “mild” recession in the back half of 2025.

According to Senyek, Trump’s steep tariffs and the subsequent retaliation from other nations could result in a significant hit to corporate earnings this year.

Consequently, the benchmark’s EPS estimates will come down by as much as 15% from the current $266, “in line with the median EPS peak to trough over the past four recessions, of 16.7%,” he told clients in a research note this week.

Note that SPX is already down some 10% versus its year-to-date high in February.

Q1 earnings season has so far been encouraging

A material uncertainty-driven hit to corporate earnings could translate to multiple contractions in 2025.

“If we apply the 15Y average price-to-earnings (P/E) of 16.6x to recessionary type EPS of $225, this implies about a 3,700 level for the S&P 500 in a mild recession,” Senyek added in his report.

That said, the first-quarter earnings season has kicked off on a positive note.

Nearly 160 S&P 500 companies have reported so far, of which 76% have come in ahead of expectations.

Plus, the blended growth rate currently sits at 8%, meaningfully above the 7.2% that experts had forecast at the end of the calendar Q1.

SPX has recently formed a death cross

Investors should note that Senyek’s forecast assumes a mild recession only.

If a severe one hits the economy instead, the ramifications for the benchmark index could be even more dire.

Even in the near term, the S&P 500 stands to relinquish its recent gains as the dreaded “death cross” has recently appeared on its daily chart.

A death cross is when an asset’s 50-day moving average (MA) falls below its longer-term 200-day moving average, and it often indicates bearish momentum ahead.

However, not everyone on Wall Street is as dovish on the SPX as Wolfe Research.

Oppenheimer, for example, continues to see upside in the benchmark index to the 5,950 level, which indicates potential for another 10% gain from current levels.

The post Risk alert: ‘mild recession’ could crash the S&P 500 to 3,700 level appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Want to be able to invest like Warren Buffett? VistaShares just launched an ETF for you
next post
Booking, Airbnb, and Expedia stocks forecasts ahead of earnings

Related Posts

Interview: H2 outlook optimistic with US production push,...

July 31, 2025

SLV silver ETF rises, but a head and...

March 4, 2025

Analysts are upbeat about AMD stock price: should...

May 12, 2025

Here’s why the ZIM Integrated stock could slip...

November 18, 2024

Middle East set to overtake Asia to become...

July 15, 2025

Amazon reaches $2 trillion market cap for the...

June 28, 2024

Analysts warn of a third year of revenue...

April 17, 2025

Morning brief: Yuan soars to strongest since Nov;...

August 27, 2025

Europe markets open: DAX jumps 0.5% despite looming...

September 8, 2025

Who is Tracy Morgan? The comedian with a...

March 18, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Bulgaria plans for continuous oil supply for Lukoil-owned refinery after US sanctions

      October 26, 2025
    • Apple Q4 earnings preview: here’s what to expect

      October 26, 2025
    • France’s offshore wind ambitions stalled by political turmoil

      October 26, 2025
    • Europe bulletin: Zelensky calls for more weapons, Russia warns against EU sanctions

      October 26, 2025
    • US digest: Jeffries endorses Mamdani, Ford’s stock surge, US sanctions Colombian president

      October 26, 2025

    Categories

    • Business (4,383)
    • Investing (3,014)
    • Latest News (2,103)
    • Politics (1,541)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved