Key Points

The S&P 500 (SNPINDEX: ^GSPC) has advanced 1% year to date, a remarkable recovery after the index slid into correction territory in March. President Trump's decision to roll back certain tariffs and pause others has given investors a confidence boost.

However, the duties imposed by the Trump administration have still raised the average tax on U.S. imports to 14.4%, according to JPMorgan Chase . That is a sixfold increase since Trump took office and the highest effective tariff rate since 1939.

Several esteemed financial figures have shared their concerns. Hedge fund billionaire Bill Ackman said the administration's trade policies could cause an "economic nuclear winter." And JPMorgan CEO Jamie Dimon warned tariffs would increase consumer prices and slow economic growth.

Will the stock market crash or soar in the second half of the year? Wall Street analysts have a somewhat surprising answer for investors.

The market is in wait-and-see mode as investors watch for signs of economic distress

Cracks are starting to appear in the U.S. economy. Consumer sentiment in May plummeted to its second-lowest level in history, and inflation expectations rose to their highest level since 1981, according to the University of Michigan.

The first-quarter GDP report showed "the U.S. may be closer to recession than expected, with a tariff-driven spike in imports dragging real growth down 0.3% annualized," commented JPMorgan strategists. Indeed, 64 economists recently surveyed by The Wall Street Journal put the odds of a recession in the next 12 months at 45%, up from 22% in January.

Wall Street analysts have downwardly revised their earnings estimates since President Trump took office because tariffs are expected to be a headwind to economic growth. The consensus estimate in January said S&P 500 companies would report 14% earnings growth in 2025, but analysts now expect 8.5% earnings growth, according to LSEG.

In short, this year has been defined by unprecedented levels of economic uncertainty and stock market volatility . Unfortunately, the future likely holds more of the same, at least until the Trump administration offers more clarity on U.S. trade policy. At that point, the situation could either get much better or much worse, depending on the context.

Wall Street expects the stock market to trade sideways in the remaining months of 2025

Wall Street has become increasingly pessimistic about the stock market as the year has progressed. In December, the S&P 500 had a median year-end target of 6,600 among the 17 investment banks and research organizations listed below. But most have downwardly revised their forecasts such that the median year-end target is now 5,900.

Data source: Yahoo Finance.

As shown above, the S&P 500 currently has a median year-end target of 5,900 among the analysts at 17 Wall Street institutions. That implies 1% downside from the current level of 5,945, which means Wall Street essentially expects the stock market to finish the year where it started.

However, that is subject to change as trade policies evolve and more economic data becomes available. The second estimate for Q1 GDP will print on Thursday, May 29. Consumer spending and personal consumption expenditure (PCE) price-index inflation (the Federal Reserve's preferred gauge) will print on Friday, May 30.

Shortly thereafter, investors will get information on May job openings on Tuesday, June 3, followed by May payroll and unemployment figures on Friday, June 6. Stocks could swing wildly as those reports print, so investors should be prepared for volatility even if Wall Street expects the market to trade sideways in the remaining months of 2025.

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