The recent downturn in U.S. equities may be just the beginning, with BCA Research analysts predicting that the S&P 500 could potentially slide to as low as 4,300. This forecast comes amid prevalent market disruptions triggered by sweeping tariffs implemented by President Trump.

According to Irene Tunkel, lead strategist at BCA Research, \”The bottom is still far off unless we see substantial changes in trade policy.\”

On Monday, the S&P 500 closed at 5,062.25, nearing bear market territory—defined as a 20% drop from recent highs. BCA analysts note that the first wave of selling, heavily influenced by uncertainties in trade and policy, has already occurred, but the next wave could prove even more impactful.

Tariffs Could Fuel Further Declines

President Trump’s latest tariff policy—which features a blanket 10% on all imports along with specific categories seeing duties of up to 50%—has shaken investor confidence. Market participants are adjusting to the prospective economic fallout, particularly regarding corporate profitability and GDP forecasts.

\”The next decline in equity values will result from actual earnings declines and economic impacts induced by tariffs,\” Tunkel explained.

Warnings from Wall Street Leaders

Key figures on Wall Street echo these concerns. Jamie Dimon, CEO of JPMorgan Chase (NYSE:JPM), recently cautioned that while a recession isn’t inevitable, persistent inflation combined with higher interest rates and the compounded impacts of tariffs could place strain on economic activity.

Dimon highlighted that these risks are compounded by increasing U.S. fiscal deficits and ongoing geopolitical tensions.

BCA’s S&P 500 Target of 4,300

If tariffs persist, BCA sees a realistic chance of the S&P 500 hitting 4,300, representing a more than 15% decrease from current levels, aligning valuations closer to long-term historical averages influenced by heightened macroeconomic risks.

Investors are advised to remain alert as these warnings signal profound impacts that could reshape market dynamics significantly.