Evercore ISI analysts have recently issued a warning about stagflation risks potentially impacting the S&P 500. Their base case projects the index reaching 6800, but warn that unfavorable conditions could lead to drops to 5200.

“Prolonged tariffs and uncertainty could raise core inflation and hamper job growth,” the report states, highlighting severe potential impacts on the economy.

As a strategy, they suggest adjusting asset allocations while focusing on sectors less likely to be affected by ongoing policy uncertainties. Investors should remain aware of evolving economic trends.