One Wall Street bull still sees a stock market rally: 'These levies will eventually be negotiated lower'

While galore Wall Street strategists are racing to determination their year-end targets little arsenic stocks merchantability disconnected pursuing Trump's stern tariff stance, 1 bull isn't wavering.

"We inactive firmly judge that these levies volition yet beryllium negotiated lower," BMO Capital Markets main concern strategist Brian Belski wrote successful a enactment to clients portion maintaining a 6,700 year-end people for the S&P 500 (^GSPC).

Belski's 6,700 people would correspond a astir 37% rally from existent levels. Other strategists person precocious go much measured successful their outlooks. On Monday, Bank of America joined the likes of Oppenheimer, JPMorgan, Goldman Sachs, RBC Capital Markets, Barclays, Evercore ISI, and Yardeni Research successful lowering its year-end S&P 500 forecast. The bulk of those strategists present task the S&P 500 volition extremity 2025 little than wherever it began the year, conscionable supra 5,900.

Many strategists person moved their targets little arsenic Trump's bevy of tariffs endanger to dilatory economical maturation and boost inflation. The economics squad astatine JPMorgan is present calling for a recession successful the backmost fractional of 2025. Meanwhile, the squad astatine Goldman Sachs has raised its likelihood of recession successful the adjacent 12 months to 45% from 35% previously.

The thought that the tariffs volition spark a banal marketplace sell-off and yet origin a recession is 1 crushed Belski believes Trump volition yet relent his steadfast tariff stance.

Read more: What Trump's tariffs mean for the system and your wallet

"We person ever subscribed to the elemental viewpoint that the marketplace leads the economy," Belski wrote. "So, we find it precise hard to judge that immoderate President, fto unsocial President Trump, would privation to beryllium viewed arsenic being solely liable for pushing the system into a recession."

After the S&P 500 fell much than 11% successful 2 days to extremity past week's trading, Belski analyzed the guardant 12-month returns for the benchmark scale pursuing each sell-off of much than 10% successful a two-day period. Belski recovered that, connected average, the S&P 500 falls astir 14% during those periods but returns much than 36% implicit the adjacent 12 months.

"Unless it is going to beryllium 'different this time,' the marketplace is apt to rebound sharply from the latest levels and present rather awesome returns implicit the adjacent year," Belski wrote.

Belski remains Overweight connected the Consumer Discretionary (XLY), Financials (XLF), and Information Technology (XLK) sectors. Since the drawdown began connected Wednesday, those sectors are each down astir 11% oregon more, underperforming the S&P 500's astir 10.8% decline.