Bank of America has cautioned that escalating trade tensions—particularly between the U.S. and China—could significantly weigh on corporate profits next year.
The bank estimates that tariffs and retaliatory measures could reduce S&P 500 earnings by approximately 9%, with an additional 1% hit stemming from Canadian tariffs. The European Union is also expected to announce countermeasures. Assuming earnings growth remains flat, BofA projects 2025 earnings per share for the S&P 500 at around $250.
The bank has revised its year-end target for the index to 5,600, with a broader trading range between 4,000 and 7,000, reflecting a higher discount rate.
Up to 4.25% now on 10s
