The S&P 500 index has fallen to the 5,062 level dipping nearly 10% in the last five trading sessions. The bloodbath in the global markets came after Trump’s tariffs went live on April 2, 2025, dubbed Liberation Day. Stock markets in the US, Europe, and Asia plunged leading to trillions of dollars being wiped away in a jiffy. Morgan Stanley has revised its price prediction for the S&P 500 index and the forecast does not sound positive.
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S&P 500 Index: Morgan Stanley Forecasts the Next Price Target
Global investment bank Morgan Stanley wrote in a latest note to stakeholders that the S&P 500 index could plummet to the 4,700 level next. That’s a dip of approximately 7% from its current range of 5,062 on Tuesday. “With the market quickly trading there on Friday and overnight futures down another 3-5% so far. Our thoughts turn to the next area of support. Which lies closer to the 200-week moving average, or 4700,” wrote the bank.
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“The equity market appears oversold in our view,” said Morgan Stanley highlighting that the S&P 500 index is still overvalued. “With uncertainty at levels investors find hard to embrace along with what we call ‘a negative pitch book’ that seemingly projects negative outcomes to infinity that’s taken hold in the near term of trader, investor, and consumer sentiment,” read the report. The US stock market could correct further leading to equities shed more in value.
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Morgan Stanley wrote that investors must be prepared for another 7-8% downturn in the S&P 500 index before bottoming out. “Valuations also offer better support at that price so investors should be prepared for another 7-8% potential downside from Friday’s close. If there is no line of sight to a less severe trade environment and the Fed remains firmly on hold,” Morgan Stanley’s analysts summed it up.
