'A sentiment shift': What Wall Street is saying after the S&P 500's 10% tumble

The S&P 500 (^GSPC) has entered correction, falling 10% from its February all-time highs arsenic governmental uncertainty has driven fears implicit the marketplace outlook.

"There's been a sentiment shift," Citi US equity strategist Scott Chronert told Yahoo Finance. "The sentiment and the lawsuit and capitalist absorption has wholly swung upside down versus wherever we started the year."

Entering 2025, the statement connected Wall Street called for the US system to turn astatine a steadfast gait and pb continued outperformance of the US equity marketplace against the remainder of the world. Now, the prevailing marketplace fearfulness is that President Trump's existent economical policies — namely tariffs, national occupation cuts, and strict migration — could further dilatory economical growth. This has prompted respective economical probe teams to little their GDP forecasts, immoderate strategists to chopped their year-end S&P 500 targets, and stocks astir the remainder of the satellite to outperform the US market.

Still, fewer are calling for an wide lackluster twelvemonth successful US stocks. In a enactment to clients this week, Yardeni Research chopped its 2025 year-end S&P 500 people from 7,000 to 6,400, which represents a astir 14% summation from existent levels. Notably, the forecast didn't travel with a projection for little net maturation this year. Instead, the Yardeni squad is present conscionable assuming the S&P 500 won't instrumentality its record-high valuation seen entering the year.

"We inactive deliberation net maturation is going to beryllium good," Yardeni Research main markets strategist Eric Wallerstein told Yahoo Finance. "There hasn't been a batch that's really fundamentally changed astir the economy. It's much truthful conscionable uncertainty is weighing connected [valuation] multiples."

Read more: What is simply a recession, and however does it interaction you?

To Wallerstein's point, portion views connected the economical outlook person soured, astir economists and equity strategists aren't really calling for a recession. And immoderate person adjacent argued that since the S&P 500 has sold disconnected truthful acold connected the maturation concerns, the market's rerating whitethorn beryllium overdone. BlackRock's main concern and portfolio strategist for the Americas Gargi Chaudhuri told Yahoo Finance her squad remains "overweight US equities."

"We're not truly disquieted astir a recession yet," Gargi Chaudhuri said. "So if determination was a interest astir recession, the speech that we would beryllium having would beryllium a small spot antithetic close now. This is conscionable a pullback from immoderate of the terms to perfection that we had successful the opening of the twelvemonth coming into this year, and this is simply a steadfast pullback."