Stock market today: Dow drops 700 points, S&P 500, Nasdaq sink as Wall Street reels from tariff, inflation fears

The recent market decline has prompted another Wall Street strategist to revise its S&P 500 forecast lower for 2025.

On Friday, UBS Global Wealth Management head of US equities David Lefkowitz predicted earnings would come in weaker than previously expected, prompting a trim to the firm’s year-end price target to 6,400 from 6,600 on the broad-based index.

“We still believe that US stocks can recover and post gains for the year. However, recent economic weakness and our expectation that tariffs will be at the higher end of our base case prompts us to lower our 2025 S&P 500 EPS estimate from USD 270 (8% growth) to USD 265 (6% growth),” Lefkowitz wrote in a note.

“We therefore trim our year-end S&P 500 price target from 6,600 to 6,400,” he added.

On Friday, the S&P 500 was trading just below the 5,600 level. The index fell into correction territory earlier this month, falling 10% from its February record high.

Despite a sell-off in megacap stocks, Lefkowitz still expects the market to reverse course and rise by the end of the year, driven in part by policy clarity, a pivot to pro-growth policy initiatives, and AI investment.

UBS’s revision comes on the heels of a downwardly revised forecast from Goldman Sachs (GS) and RBC Capital Markets.

This week, Barclays (BCS) slashed its forecast on the benchmark index to 5,900 from 6,600, based on expectations for lower earnings.