Trading desks across Wall Street are bracing for more losses in the S&P 500 this quarter, even amid Wednesday’s green wave. According to Bloomberg, traders at major banks say the rally doesn’t change the bigger picture: President Donald Trump is about to drop new tariffs, and they expect it to hit stocks hard.
Goldman Sachs, Bank of America, and others said the Wednesday announcement will likely bring more volatility to a market that just came out of its worst quarter since 2022. The expected trade measures are being flagged as a trigger for more selling pressure, not a turnaround.
Traders across Wall Street expect deeper pullback
Goldman Sachs sent out a note on March 28 saying, “The bearish calls are getting louder across the floor and client base.” The note said this week’s volatility could look a lot like what markets saw during the U.S. election in November. JPMorgan Chase is staying tactically bearish, too, pointing to policy risk and the economic drag of new tariffs as key issues for the second quarter.
Alexander Altmann, global head of equities tactical strategies at Barclays, said the problem is that Trump’s announcement might be vague. That kind of uncertainty, he said, keeps investors frozen. “Uncertainty is the killer of everything in markets,” Altmann told Bloomberg. “It kills investment decisions, corporate spending, as well as business and consumer confidence.”
Wall Street’s biggest sell-side strategists are also stepping back. At the end of last year, they predicted the S&P 500 would climb for the third year in a row. Their average year-end target was 6,600. Now, three of the most optimistic ones have admitted they overshot. They still say the market might climb in the final three quarters of 2025, but they’re not betting on it yet.
Some desks are going further. John Tully from Bank of America said the S&P 500, which is hovering near 5,600, could fall below 5,500. A recent note from UBS Group said it could even go as low as 5,400 if Trump goes forward with the expected 20% tariff rate.
Michael Romano, head of hedge fund equity derivative sales at UBS Securities, warned clients that the market could swing hard in either direction. “There is a wide range of outcomes with a violent tail in both directions,” Romano wrote. “What’s particularly concerning are the high probabilities being assigned to the extreme downside moves.”
Stock market revives, with Tesla leading as Elon is expected to leave DOGE
Wednesday’s numbers didn’t reflect any of that caution. The S&P 500 rose 0.4%. The Nasdaq Composite moved up too. The Dow Jones Industrial Average gained 163 points, or 0.3%. Earlier in the day, though, the S&P 500 had dropped more than 1%, so this wasn’t a steady climb.
One of the bigger stock movers Wednesday was Tesla. Its shares were down earlier in the day but rebounded 2% after Politico reported that Trump plans to push Elon Musk out of his advisory role and also away from DOGE (Department of Government Efficiency).
The report said Trump told his cabinet Musk will be stepping back from that position in the coming weeks. The TSLA stock is now on track to end the day up 12% from its earlier low.
Meanwhile, Treasury Secretary Scott Bessent told lawmakers that the duties announced Wednesday will act as a ceiling, not a floor. Some investors still hope the final tariff number will be lower than what’s been floated. The Washington Post reported Monday that the White House is looking at 20% tariffs on most imports. But the report also said Trump’s advisors are still arguing over the details. Nothing’s final.
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