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Yahoo
7 hours ago
- Business
- Yahoo
2 Unexpected Reasons Tariffs Could Make Your Rent More Expensive
While the future of tariffs remains to be seen after U.S. Court of International Trade ruled that President Donald Trump had overstepped his authority by imposing them and then a federal appeals court temporarily reinstated them, it's definitely possible that Trump is able to move ahead with his initial plans. If Trump's tariffs are put into effect, the price of many goods could rise — but, perhaps unexpectedly, rent prices could rise as well. Find Out: Read Next: Here's a closer look at why rent could get more expensive if Trump's tariffs are imposed. Renters who move into new buildings will likely see higher prices than they would were tariffs not in effect. 'When construction materials become more expensive — whether it's imported cabinetry, electrical components or flooring — those increased costs squeeze developers and contractors,' said Mike Petrakis, founder and CEO of PowerPay, which works with contractors to provide affordable home improvement payment options. 'In many cases, that pressure gets passed downstream,' he continued. 'For new apartment builds, it means higher development costs, which translate into higher rents to meet return thresholds.' In addition to construction materials, appliance prices are also expected to increase if tariffs are imposed. 'All of these things will increase the cost of construction, providing services and maintaining properties, which are usually passed along to residents in the form of increased rents,' said Jeff Lail, COO of WithMe, Inc., which provides tech-enabled amenity solutions. Learn More: Even renters who don't move to new construction buildings could see rent hikes as the cost to maintain existing buildings increases. 'Property owners operating on thin margins may raise rents, not because they're improving units, but simply because maintaining them costs more,' Petrakis said. 'It's a subtle cycle, but over time, renters end up footing the bill for global policy decisions.' More From GOBankingRates Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck 7 Things You'll Be Happy You Downsized in Retirement This article originally appeared on 2 Unexpected Reasons Tariffs Could Make Your Rent More Expensive Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNET
8 hours ago
- Business
- CNET
Tariffs Explained: Everything You Need to Know as Trump's Policies Go to Court
Donald Trump's wide-ranging taxes on imports were reinstated this week after being deemed illegal by a trade court but their ultimate fate is yet to be decided. James Martin/CNET President Donald Trump's second-term economic plan can be summed up in one word: tariffs. When his barrage of these import taxes went into overdrive a month ago, markets trembled and business leaders sounded alarms about the economic damage they would cause. After weeks of uncertainty and clashes with major companies, Trump's tariffs hit their biggest roadblock yet in court before being reinstated ahead of a final ruling. All the while, the implications of those tariffs for your personal finances are still looming. Late Wednesday, the US Court of International Trade ruled that Trump had overstepped his authority when he imposed tariffs, effectively nullifying the tariffs, after concluding that Congress has the sole authority to issue tariffs and decide other foreign trade matters, and that the International Emergency Economic Powers Act of 1977 -- which Trump has used to justify his ability to impose them -- doesn't grant the president "unlimited" authority on tariffs. The next day, an appeals court allowed the tariffs to go back into effect for the time being, while the administration calls for the Supreme Court to overturn the trade court ruling altogether. Should You Buy Now or Wait? Our Experts Weigh In on Tariffs Should You Buy Now or Wait? Our Experts Weigh In on Tariffs Click to unmute Video Player is loading. 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This modal can be closed by pressing the Escape key or activating the close button. Close Modal Dialog This is a modal window. This modal can be closed by pressing the Escape key or activating the close button. Should You Buy Now or Wait? Our Experts Weigh In on Tariffs However things shake out in the end, the initial ruling certainly came as a relief to many, given the chaos and uncertainty that Trump's tariffs how caused thus far. For his part, Trump has recently lashed out against companies -- like Apple and Walmart -- that have reacted to the tariffs or discussed their impacts in ways he dislikes. Apple has been working to move manufacturing for the US market from China to relatively less-tariffed India, to which Trump has threatened them with a 25% penalty rate if they don't bring manufacturing to the US instead. Experts have predicted that a US-made iPhone, for example, would cost consumers about $3,500. During a recent earnings call, Walmart warned that prices would rise on things like toys, tech and food at some point in the summer, which prompted Trump to demand the chain eat the costs themselves, another unlikely scenario. Amid all this noise, you might still be wondering: What exactly are tariffs and what will they mean for me? The short answer: Expect to pay more for at least some goods and services. For the long answer, keep reading, and for more, check out CNET's price tracker for 11 popular and tariff-vulnerable products. What are tariffs? Put simply, a tariff is a tax on the cost of importing or exporting goods by a particular country. So, for example, a "60% tariff" on Chinese imports would be a 60% tax on the price of importing, say, computer components from China. Trump has been fixated on imports as the centerpiece of his economic plans, often claiming that the money collected from taxes on imported goods would help finance other parts of his agenda. The US imports $3 trillion of goods from other countries annually. The president has also, more recently, shown a particular fixation on trade deficits, claiming that the US having a trade deficit with any country means that country is ripping the US off. This is a flawed understanding of the matter, as a lot of economists have said, deficits are often a simple case of resource realities: Wealthy nations like the US buy specific things from nations that have them, while those nations might in turn not be wealthy enough to buy much of anything from the US. While Trump deployed tariffs in his first term, notably against China, he ramped up his plans more significantly for the 2024 campaign, promising 60% tariffs against China and a universal 20% tariff on all imports into the US. Now, tariffs against China are more than double that amount and a universal tariff on all exports is a reality. "Tariffs are the greatest thing ever invented," Trump said at a campaign stop in Michigan last year. At one point, he called himself "Tariff Man" in a post on Truth Social. Who pays the cost of tariffs? Trump repeatedly claimed, before and immediately after returning to the White House, that the country of origin for an imported good pays the cost of the tariffs and that Americans would not see any price increases from them. However, as economists and fact-checkers stressed, this is not the case. The companies importing the tariffed goods -- American companies or organizations in this case -- pay the higher costs. To compensate, companies can raise their prices or absorb the additional costs themselves. So, who ends up paying the price for tariffs? In the end, usually you, the consumer. For instance, a universal tariff on goods from Canada would increase Canadian lumber prices, which would have the knock-on effect of making construction and home renovations more expensive for US consumers. While it is possible for a company to absorb the costs of tariffs without increasing prices, this is not at all likely, at least for now. Speaking with CNET, Ryan Reith, vice president of International Data's worldwide mobile device tracking programs, explained that price hikes from tariffs, especially on technology and hardware, are inevitable in the short term. He estimated that the full amount imposed on imports by Trump's tariffs would be passed on to consumers, which he called the "cost pass-through." Any potential efforts for companies to absorb the new costs themselves would come in the future, once they have a better understanding of the tariffs, if at all. Which Trump tariffs have gone into effect? Following Trump's "Liberation Day" announcements on April 2, the following tariffs are in effect: A 25% tariff on all steel and aluminum imports. A 30% tariff on all Chinese imports until Aug. 10 while negotiations continue. China being a major focus of Trump's trade agenda, this rate has been notably higher than others and has steadily increased as Beijing returned fire with tariffs of its own, peaking at 145%, which it could return to down the line if a deal is not reached. 25% tariffs on imports from Canada and Mexico not covered under the 2018 USMCA trade agreement brokered during Trump's first term. The deal covers roughly half of all imports from Canada and about a third of those from Mexico, so the rest are subject to the new tariffs. Energy imports not covered by USMCA only will be taxed at 10%. A 25% tariff on all foreign-made cars and auto parts. A sweeping overall 10% tariff on all imported goods. For certain countries that Trump said were more responsible for the US trade deficit, Trump imposed what he called "reciprocal" tariffs that exceed the 10% level: 20% for the 27 nations that make up the European Union, 26% for India, 24% for Japan and so on. These were meant to take effect on April 9 but were delayed by 90 days as a result of historic stock market volatility, which makes the new effective date July 8. Trump's claim that these reciprocal tariffs are based on high tariffs imposed against the US by the targeted countries has drawn intense pushback from experts and economists, who have argued that some of these numbers are false or potentially inflated. For example, the above chart claims a 39% tariff from the EU, despite its average tariff for US goods being around 3%. Some of the tariffs are against places that are not countries but tiny territories of other nations. The Heard and McDonald Islands, for example, are uninhabited. We'll dig into the confusion around these calculations below. Notably, that minimum 10% tariff will not be on top of those steel, aluminum and auto tariffs. Canada and Mexico were also spared from the 10% minimum additional tariff imposed on all countries the US trades with. On April 11, the administration said smartphones, laptops and other consumer electronics, along with flat panel displays, memory chips and semiconductors, were exempt from reciprocal tariffs. But it wasn't clear whether that would remain the case or whether such products might face different fees later. How were the Trump reciprocal tariffs calculated? The numbers released by the Trump administration for its barrage of "reciprocal" tariffs led to widespread confusion among experts. Trump's own claim that these new rates were derived by halving the tariffs already imposed against the US by certain countries was widely disputed, with critics noting that some of the numbers listed for certain countries were much higher than the actual rates and some countries had tariff rates listed despite not specifically having tariffs against the US at all. In a post to X that spread fast across social media, finance journalist James Surowiecki said that the new reciprocal rates appeared to have been reached by taking the trade deficit the US has with each country and dividing it by the amount the country exports to the US. This, he explained, consistently produced the reciprocal tariff percentages revealed by the White House across the board. "What extraordinary nonsense this is," Surowiecki wrote about the finding. The White House later attempted to debunk this idea, releasing what it claimed was the real formula, though it was quickly determined that this formula was arguably just a more complex version of the one Surowiecki deduced. What will the Trump tariffs do to prices? In short: Prices are almost certainly going up, if not now, then eventually. That is, if the products even make it to US shelves at all, as some tariffs will simply be too high for companies to bother dealing with. While the effects of a lot of tariffs might not be felt straight away, some potential real-world examples have already emerged. Microsoft has increased prices across the board for its Xbox gaming brand, with its flagship Xbox Series X console jumping 20% from $500 to $600. Elsewhere, Kent International, one of the main suppliers of bicycles to Walmart, announced that it would be stopping imports from China, which account for 90% of its stock. Speaking about Trump's tariff plans just before they were announced, White House trade adviser Peter Navarro said that they would generate $6 trillion in revenue over the next decade. Given that tariffs are most often paid by consumers, CNN characterized this as potentially "the largest tax hike in US history." New estimates from the Yale Budget Lab, cited by Axios, predict that Trump's new tariffs will cause a 2.3% increase in inflation throughout 2025. This translates to about a $3,800 increase in expenses for the average American household. Reith, the IDC analyst, told CNET that Chinese-based tech companies, like PC makers Acer, Asus and Lenovo, have "100% exposure" to these import taxes as they currently stand, with products like phones and computers the most likely to take a hit. He also said that the companies best positioned to weather the tariff impacts are those that have moved some of their operations out of China to places like India, Thailand and Vietnam, singling out the likes of Apple, Dell and HP. Samsung, based in South Korea, is also likely to avoid the full force of Trump's tariffs. In an effort to minimize its tariff vulnerability, Apple has begun to move the production of goods for the US market from China to India. Will tariffs impact prices immediately? In the short term -- the first days or weeks after a tariff takes effect -- maybe not. There are still a lot of products in the US imported pre-tariffs and on store shelves, meaning the businesses don't need a price hike to recoup import taxes. Once new products need to be brought in from overseas, that's when you'll see prices start to climb because of tariffs or you'll see them become unavailable. That uncertainty has made consumers anxious. CNET's survey revealed that about 38% of shoppers feel pressured to make certain purchases before tariffs make them more expensive. About 10% say they have already made certain purchases in hopes of getting them in before the price hikes, while 27% said they have delayed purchases for products that cost more than $500. Generally, this worry is the most acute concerning smartphones, laptops and home appliances. Mark Cuban, the billionaire businessman and Trump critic, voiced concerns about when to buy certain things in a post on Bluesky just after Trump's "Liberation Day" announcements. In it, he suggested that consumers might want to stock up on certain items before tariff inflation hits. "It's not a bad idea to go to the local Walmart or big box retailer and buy lots of consumables now," Cuban wrote. "From toothpaste to soap, anything you can find storage space for, buy before they have to replenish inventory. Even if it's made in the USA, they will jack up the price and blame it on tariffs." CNET's Money team recommends that before you make any purchase, especially of a high-ticket item, be sure that the expenditure fits within your budget and your spending plans in the first place. Buying something you can't afford now because it might be less affordable later can be burdensome, to say the least. What is the goal of the White House tariff plan? The typical goal behind tariffs is to discourage consumers and businesses from buying the tariffed, foreign-sourced goods and encourage them to buy domestically produced goods instead. When implemented in the right way, tariffs are generally seen as a useful way to protect domestic industries. One of the stated intentions for Trump's tariffs is along those lines: to restore American manufacturing and production. However, the White House also claims to be having negotiations with numerous countries looking for tariffs exemptions and some officials have also floated the idea that the tariffs will help finance Trump's tax cuts. You don't have to think about those goals for too long before you realize that they're contradictory: If manufacturing moves to the US or if a bunch of countries are exempt from tariffs then tariffs aren't actually being collected and can't be used to finance anything. This and many other points have led a lot of economists to allege that Trump's plans are misguided. In terms of returning -- or "reshoring" -- manufacturing in the US, tariffs are a better tool for protecting industries that already exist because importers can fall back on them right away. Building up the factories and plants needed for this in the US could take years, leaving Americans to suffer under higher prices in the interim. That problem is worsened by the fact that the materials needed to build those factories will also be tariffed, making the costs of "reshoring" production in the US too heavy for companies to stomach. These issues, and the general instability of American economic policies under Trump, are part of why experts warn that Trump's tariffs could have the opposite effect: keeping manufacturing out of the US and leaving consumers stuck with inflated prices. Any factories that do get built in the US because of tariffs also have a high chance of being automated, canceling out a lot of job creation potential. To give you one real-world example of this: When warning customers of future price hikes, toy maker Mattel also noted that it had no plans to move manufacturing to the US. Trump has reportedly been fixated on the notion that Apple's iPhone -- the most popular smartphone in the US market -- can be manufactured entirely in the US. This has been broadly dismissed by experts, for a lot of the same reasons mentioned above, but also because an American-made iPhone could cost upward of $3,500. One report from 404 Media dubbed the idea "a pure fantasy." The overall sophistication and breadth of China's manufacturing sector has also been cited, with CEO Tim Cook stating in 2017 that the US lacks the number of tooling engineers to make its products. For more, see how tariffs might raise the prices of Apple products and find some expert tips for saving money.
Yahoo
8 hours ago
- Business
- Yahoo
Trump's move-fast-and-break-things tariff strategy collides with reality
President Donald Trump's move-fast-and-break-things ethos this week led to a major setback for his trade policy, leaving the White House scrambling to chart its way around a potentially devastating legal ruling. Yet with the central element of his economic agenda in jeopardy, Trump is digging in on his vow to impose steep tariffs by any means necessary — and stick it to those who question his strength and think he's bound to 'chicken out.' He and administration officials have said that negotiations with other countries will continue, are insisting they'll win their current tariff battle in court and are even preparing back-up strategies for new tariffs in case they don't. Trump's determination to move fast could slow implementation of his tariff regime. It also threatens to cost him credibility with businesses he's counting on to invest in the U.S. and world leaders whose buy-in he needs to negotiate trade deals. Still, few expect a different posture from a famously intransigent president or any second-guessing following the Wednesday ruling from the U.S. Court of International Trade, which briefly halted most of the tariffs. 'I don't think that's going to stop, in any way, the administration. The president's going to try to assert his tariff authority under any avenue possible,' said Marc Short, who served as Trump's legislative affairs director and Vice President Mike Pence's chief of staff during the president's first term. 'The president is not one to accept defeat. He certainly didn't in 2020. It's not like because he had a bad court ruling he's going to turn his back on this.' Trump and his top lieutenants see the speed with which he is moving to enact not just trade policy but his entire agenda as a feature, not a bug. Trade adviser Peter Navarro, who has been with Trump since his first term, often refers to the pace as 'Trump time,' and other senior White House staff members frequently chalk up any inconsistency or volatility in the president's policymaking approach to his dealmaking acumen. 'We have to act fast,' Trump told reporters in the Oval Office on Friday afternoon. 'We have to be fast and nimble.' And Trump may be especially keen on refuting the notion that he is weak after the moniker TACO, or 'Trump Always Chickens Out,' caught on among Wall Street traders, said one Trump ally outside the White House, granted anonymity to speak candidly. "I don't think Trump can back down now, mainly because of this TACO theme," the person said. "He's clearly super irritated by it and it's like a challenge to his very manhood now.' European leaders have continued to chafe at the U.S.'s erratic approach to trade, a preview of what Trump might face at the G7 summit next month in Canada as he arrives with a slightly less-firm negotiating position. Still, the president has shown no inkling that he plans to back away from tariffs, which he's often called the 'most beautiful word' in the English language. Inside the West Wing, aides downplayed the legal whiplash as a minor stumbling block rather than a major threat to a trade policy seen as increasingly central to the president's economic legacy. And while they bristled at the TACO-centric talk, there was no expectation that Trump would veer off his maximalist trade push. 'He's been consistent on tariffs and trade since the 1980s,' said a White House official, granted anonymity to discuss internal deliberations. 'He's not firm on this because somebody made a taco meme and it's going viral.' Administration officials are readying backup plans should the broad set of levies they have placed on U.S. trading partners be again put on hold in court, which trade attorneys and others around the administration expect when an appeals court revisits the matter in June. Among them is a mechanism that would allow it to quickly impose tariffs without congressional approval or a more burdensome evidence-gathering and review process, according to two people familiar with discussions about the administration's trade strategy, granted anonymity to discuss strategy, one of several under consideration, would allow the president to replace existing 10 percent across-the-board tariffs on countries with levies of up to 15 percent, but only for six months. After that, Trump would need Congress' approval to extend them. 'It's important to understand that the president's trade team has been thinking about these legal tools for years, right? We have a lot of folks on TV and the internet who've been thinking about it for about six minutes,' said U.S. Trade Representative Jamieson Greer during an interview on CNBC Friday morning. 'So, of course, these are things that we've been considering and talking about for a very long time. All these things are on the table.' But so-called Section 122 tariffs — named for the part of the Trade Act that outlines them — have never been tested in court, meaning the administration could find itself stymied once again. In order to move quickly to enact the so-called Liberation Day tariffs, the White House leaned on emergency powers in a federal law known as IEEPA, an approach that a federal court on Wednesday said exceeded his legal authority. 'Whether you move forward under IEEPA or a different authority, the president has made clear that tariffs are a central plank of his economic agenda and he is going to use the leverage the tariffs create to drive better outcomes for the U.S.,' said Everett Eissenstat, who served as deputy director of the National Economic Council and a key trade adviser in Trump's first term. 'Whether this tool is the tool or there's another tool, tariff authority, he's going to move forward.' But even Trump allies fear that those in the White House aren't doing enough to counsel the president on his best options, leaning into his desire to move quickly without presenting him with a full suite of more durable strategies. 'Whether you're for tariffs or not, it's pretty clear the president doesn't have unilateral authority to raise taxes,' said Stephen Moore, an outside economic adviser to Trump who has long been skeptical of the administration's go-it-alone trade approach. "It's pretty clear that at some point Congress is going to have to vote on tariff policy." As advisers mulled strategies to see their way through the thicket of looming legal challenges, Trump sought to demonstrate resolve. After a long social media post on Thursday night blasting the International Court of Trade and a ruling that he said 'would completely destroy Presidential Power,' Trump continued posting on Friday morning with a broadside aimed at Chinese President Xi Jinping. Claiming that his drastic reduction of the 145 percent tariffs against Beijing was a matter of saving China from 'grave economic danger,' Trump asserted that it 'HAS TOTALLY VIOLATED ITS AGREEMENT WITH US.' Greer attributed the president's frustration to the Chinese 'slow-rolling their compliance' with the agreement hashed out earlier this month. And in perhaps the clearest sign of the president's defensiveness in the face of Wall Street criticism, Trump opened a long, freewheeling Oval Office press conference on Friday afternoon by directing an aide to position an iPad on the Resolute Desk from which he played a clip of CNBC's Rick Santelli — whose 2009 rant gave birth to the Tea Party movement — praising his economic record. As the clip played, Trump raised his eyebrows and nodded at the journalists and aides positioned in front of him. 'Not bad, right?' Trump said when the clip finished playing, as departing adviser Elon Musk implored people in the room to applaud.
New York Times
9 hours ago
- Business
- New York Times
A Trade Court Rebuke of Trump's Tariffs Offers Little Relief to Canada
For a fleeting moment, it looked as if Canada's trade troubles were over. The U.S. Court of International Trade ruled on Wednesday that President Trump did not have 'unbounded authority' to impose many of his tariffs, including some against Canada. In another blow to Mr. Trump, it ordered an immediate end to collection of the tariffs. [Read: Trump Tariffs Ruled Illegal by Federal Judicial Panel] But then came the sobering, not-so-fine print. The case focused on the Trump administration's use of the International Emergency Economic Powers Act to impose tariffs, which for Canada is based on the false claim that large amounts of fentanyl cross the border from Canada to the United States. So the ruling affected the sweeping tariffs against Canadian exports that were imposed under that law, but it did not affect Mr. Trump's 25 percent duties on Canadian cars, auto parts, steel and aluminum, which were imposed using other laws. (The auto parts tariff had previously been suspended.) And products from Canada that meet minimum North American content levels under the currently tattered free trade agreement among Canada, the United States and Mexico were already exempt. Still, Prime Minister Mark Carney told the House of Commons that he welcomed the decision. But he added, 'We recognize that our trading relationship with the U.S. is still profoundly and adversely affected.' Want all of The Times? Subscribe.
Yahoo
10 hours ago
- Business
- Yahoo
Select Wall Street Analysts Are Raising Their S&P 500 Targets for 2025. Here's What You Should Do, Based on Decades of History.
President Trump's "Liberation Day" tariffs rocked Wall Street in April, prompting many top analysts to slash their 2025 forecasts for the S&P 500. Two of those analysts reversed course after Trump paused the worst of the tariffs, and a recent court ruling could hold them off indefinitely. History provides a clear playbook for dealing with stock market volatility, and it's simpler than you might think. 10 stocks we like better than S&P 500 Index › The S&P 500 (SNPINDEX: ^GSPC) was down by as much as 19% from its all-time high after President Donald Trump imposed sweeping tariffs on America's trading partners in April. Analysts at almost every top investment firm on Wall Street agreed the tariffs would trigger an economic slowdown, which would dent corporate earnings. As a result, they raced to slash their 2025 price targets for the S&P 500, and some of them even predicted the index would deliver a negative return for the year. But optimism crept back onto Wall Street after Trump quickly paused some of the harsher tariffs. Plus, in another positive turn of events, a ruling by the U.S. Court of International Trade on May 28 suggested the president never had grounds to impose the tariffs at all. This decision was paused by the Federal Circuit Court of Appeals, setting the stage for a legal battle over the next month. The S&P 500 is steadily recovering, and at least two top analysts have partly reversed their recent price target cuts. These swings can be very difficult to navigate, but history provides a very clear playbook for dealing with stock market volatility. Here's what investors should do. Before we dive into where the S&P 500 might go next, let's recap what happened in April, because tariffs probably aren't going away entirely. Trump dubbed April 2 "Liberation Day," and he marked the occasion by announcing a 10% tariff on all imported goods from every country in the world. He also added a series of much higher "reciprocal tariffs" on imports from specific countries that have large trade imbalances with the U.S. Trump paused the reciprocal tariffs for 90 days shortly after April 2 to make way for good-faith negotiations with America's trading partners, but the May 28 ruling by the U.S. Court of International Trade blocked them entirely. They were reinstated a few hours later by the Court of Appeals for the Federal Circuit, which will oversee arguments from the plaintiffs and the government in early June. In other words, there is still a chance the May 28 ruling will stand, potentially setting up an even bigger showdown in the Supreme Court. The May 28 ruling also blocked the sweeping 10% tariffs, but even if this stands, there are other ways for the administration to reinstate them using a different justification. For example, Section 122 of the Trade Act of 1974 could give Trump the authority to impose broad tariffs of up to 15% on imported goods, but they can only remain in place for 150 days (roughly four months). Trump is trying to achieve two main objectives with the trade levies. First, he wants to encourage companies to manufacture more of their products inside America. Second, he wants other countries to lower their trade barriers so U.S. businesses can sell their products into those markets with more freedom. On the first point, it could take years for American companies to move their offshore production back home. Technology analyst Dan Ives from Wedbush Securities predicts Apple might need a full decade to move iPhone manufacturing to the U.S. from its facilities in China, and in the meantime, American consumers would have to suffer under the weight of tariffs, which increase the price of the goods they buy each day. Any reduction in consumer spending would have downstream effects on businesses and supply chains all over the country, which might even lead to a recession. In that scenario, corporate earnings would take a significant hit, which is why analysts were so downbeat on the S&P 500 after April 2. Below is a list of top Wall Street firms and investment banks that slashed their 2025 targets for the S&P 500 on the back of the rising global trade tensions: Oppenheimer cut its S&P 500 target for 2025 from 7,100 to 5,950. Yardeni Research slashed its target from 7,000 to 6,400, and then again to 6,000. Goldman Sachs lowered its estimate from 6,500 to 6,200, and then to 5,700. RBC Capital Markets reduced its forecast from 6,600 to 5,500. Barclays trimmed its target from 6,600 to 5,900. UBS cut its estimate from 6,400 to 5,800. HSBC slashed its target from 6,700 to 5,600. The S&P 500 ended 2024 at a price of 5,881, so the revised targets from Goldman Sachs, RBC Capital Markets, UBS, and HSBC implied a negative return for the index this year. But sentiment has started to turn for the better now that Trump's reciprocal tariffs are on hold, and top analysts at two firms recently increased their S&P 500 targets for this year. In early May, David Kostin and his team at Goldman Sachs lifted their three-month price target to 5,900, and their 12-month target to 6,500. Around the same time, Ed Yardeni from Yardeni Research raised his 2025 target back to 6,500, specifically citing the rollback of Trump's tariffs. The S&P 500 has already climbed back to 5,900 as of this writing, so it's up by a whopping 23% from its April low point. It would still have to climb by another 4% to reclaim its all-time high, but it's certainly trending in the right direction. Here's the bottom line: Market sell-offs and extreme volatility are a normal part of investing. According to Capital Group, corrections of at least 10% occur every two and a half years, on average. Crashes of 20% or more -- which is the technical threshold for a bear market -- happen every six years or so. Investors have weathered four bear markets over the last 25 years alone, triggered by the bursting of the dot-com internet bubble in 2000, the global financial crisis in 2008, the COVID-19 pandemic in 2020, and the inflation surge in 2022. The S&P 500 went on to make new record highs every single time. Steep sell-offs are the price investors pay for the opportunity to earn significant returns over the long run. In fact, the S&P 500 has delivered a compound annual return of 10.3% since it was established in 1957, even after accounting for every sell-off, correction, and bear market. The lesson? Stay the course and focus on the long run. History suggests a market sell-off is more likely to be a buying opportunity than a reason to panic sell. After all, the big swings in Wall Street's price targets this year are proof that even the experts struggle to predict the short-term direction of the stock market. Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 HSBC Holdings is an advertising partner of Motley Fool Money. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Goldman Sachs Group. The Motley Fool recommends Barclays Plc and HSBC Holdings. The Motley Fool has a disclosure policy. Select Wall Street Analysts Are Raising Their S&P 500 Targets for 2025. Here's What You Should Do, Based on Decades of History. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
