Wall Street Escalates U.S. Recession Warnings! Successive Downgrades of U.S. Stock Targets
Recently, global financial markets have been plunged into rare turbulence due to the reciprocal tariff policy announced by Trump last week. Like a boulder thrown into a calm lake, this policy has sent ripples across markets, with potential retaliatory tariffs, heightened uncertainties about economic growth and inflation persistently weighing on macroeconomic outlooks and risk appetite. Against this backdrop, Wall Street has intensified its warnings about a U.S. recession, with major institutions successively lowering their U.S. stock market targets.
Trump’s reciprocal tariff policy aims to address what he calls "unfair" trade practices against the U.S. in international commerce. However, the ripple effects of this policy have quickly spread across global markets. Higher tariffs mean increased trade costs, which not only hinder U.S. companies' overseas expansion but also drive up import prices, thereby affecting domestic consumer markets. Globally, countries are likely to retaliate against U.S. tariffs, further escalating trade tensions and casting a dark shadow over global economic growth prospects.
In this complex economic environment, market pricing has clearly signaled rising risks of a U.S. recession. Investor concerns about the economic outlook have deepened, prompting capital to seek safer investment havens, with the stock market bearing the brunt of the impact. As the epicenter of global finance, Wall Street is highly sensitive to market shifts. Major financial institutions, after thorough analysis of current economic data and policy trends, have issued escalating warnings about U.S. recession risks and repeatedly downgraded their U.S. stock market targets.
Goldman Sachs, for instance, noted in its latest report that tariff-induced uncertainties would significantly dampen corporate earnings expectations. As trade tensions intensify, U.S. firms may face disruptions in global supply chains, rising raw material costs, and shrinking overseas market shares—all of which would severely undermine the earnings growth of U.S.-listed companies. Consequently, Goldman Sachs has lowered its stock price targets for multiple sectors, including manufacturing and technology, which are particularly vulnerable to trade conflicts.
JPMorgan shares a similar view. The bank’s analysts warn that potential retaliatory tariffs could not only hurt U.S. corporate revenues but also fuel inflationary pressures. To curb inflation, the Federal Reserve may adopt more aggressive monetary policies, delivering a double blow to the stock market. On one hand, higher financing costs would squeeze corporate profits; on the other, tighter liquidity could dampen investor risk appetite. As a result, JPMorgan has also downgraded its overall U.S. stock market targets, advising investors to exercise caution in equity allocations.
For retail investors, Wall Street’s warnings and successive stock target cuts serve as a critical signal. In today’s volatile market environment, investment decisions require heightened prudence. Investors should closely monitor developments in global trade, particularly follow-up adjustments to tariff policies, while also optimizing their portfolios by increasing allocations to defensive assets such as bonds and gold.
From a macroeconomic perspective, rising U.S. recession risks threaten not only the domestic economy but also the global economic landscape. As the world’s largest economy, U.S. economic fluctuations often trigger chain reactions worldwide. Should the U.S. slip into recession, global trade volumes would shrink significantly, placing immense pressure on emerging market economies.
In summary, the chain reactions triggered by Trump’s reciprocal tariff policy are posing severe challenges to the U.S. economy. Wall Street’s escalating recession warnings and successive stock market downgrades sound an alarm for investors. Whether the global economy can maintain stable growth amid this trade storm remains to be seen. Investors must stay vigilant and adapt their strategies to navigate an ever-changing market landscape.
