Morgan Stanley Maintains S&P 500 Target For 2025 Despite Trump Tariff Shock

Morgan Stanley is sticking to its guns regarding the S&P 500 target for 2025, stating that the markets will look past near-term hurdles.

In a recent note seen by CNBC, Morgan Stanley’s U.S. equity strategist Michael Wilson described the market shock after the announcement of “Liberation Day” tariffs as capitulatory price action.

Wilson thinks that as a result, the bottom is in for U.S. equities, assuming there isn’t a deep recession.

“While we’ve been surprised by the magnitude and speed of the growth headwinds in 1H tied to tariffs, the cadence of our view around policy sequencing still holds,” Wilson said.

At the beginning of the year, Morgan Stanley’s 12-month target for the S&P 500 was 6,500. The index is currently hovering around 5,861, nearly 11% away from Morgan Stanley’s year-end target.

Wilson predicts that while the S&P 500 could hover around 6,100 in the first half of 2025, it will begin its progression toward 6,500 in the second half, setting the index on its way to achieving Morgan Stanley’s 12-month target, aided by tax cuts, deregulation, and a favorable interest rate environment.

In his bull case scenario, Wilson says the S&P 500 could touch the 7,200 mark, implying a 23% upside from current levels. On the other hand, his bear case scenario puts the index at 4,900, down 16% from current levels.

Meanwhile, the SPDR SPY 500 ETF (SPY), which represents the S&P 500 index, was up 0.40% at the time of writing.

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Also See: Fed’s Waller Says Path To Rate Cuts In 2025 Visible But Hinges On Trump’s Tariff Wars