Rising global trade tensions could limit the stock market’s gains this year, according to Barclays. Strategist Venu Krishna lowered his 2025 S & P 500 target to 5,900 from 6,600. That implies upside of just 0.3% from where the benchmark began the year. His forecast is now the lowest 2025 outlook among those featured in CNBC Pro’s Market Strategist Survey . The reduction comes as the U.S. imposes tariffs on goods from key trade partners such as Canada, Mexico and China. The White House is expected to announce what President Donald Trump refers to as reciprocal tariffs on other countries in early April. On top of that, recent survey data shows consumers and investors are concerned over the U.S. economic outlook going forward. “Our base case assumes that earnings take a hit as tariffs (higher China tariffs stick but do not escalate, reciprocal tariffs amount to 5% on RoW) contribute to material slowing in US activity that nonetheless stops short of outright recession,” Krishna wrote. “Given significant uncertainty around trade policy, our bull and bear case EPS estimates hinge upon the final scope and severity of tariffs (60% probability).” “For the bull case, we assume Trump walks back tariffs as political and industry opposition gets louder, easing both trade tensions and headwinds on macro growth, allowing SPX valuations to re-test t12m highs up to 6700 (25% probability),” he said. “However, in our bear case, the full impact of Canada and Mexico tariffs, in tandem with reciprocal and China tariffs, creates a much larger direct drag on SPX EPS growth, with second order effects likely pushing US GDP into contraction and the S & P 500 into a bear market down to 4400 (15% probability).” .SPX YTD mountain SPX year to date A move to 4,400 points to a 25.2% drop from where the S & P 500 started 2025, while a surge to 6,700 would put the index in record territory once more. The benchmark it an all-time intraday high of 6,147.43 in February. The S & P 500 has been on a rollercoaster ride in the past month, losing 3% in that time. The index also dipped into correction territory, briefly trading more than 10% below its record high before recovering slightly. Krishna upgraded the financial sector to positive, adding that he prefers that sector along with health care and Big Tech going forward. Financials and health care are up 4.6% and 5.6%, respectively, year to date, while the S & P 500 tech sector is down 7.7%. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
