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Tariffs and our downgraded forecast for the S&P 500

We are significantly downgrading our end-2025 forecast for the S&P 500 for two key reasons. The first is yesterday’s announcement of greater tariffs on US imports than we had assumed. In such circumstances, we no longer think the economic backdrop will be sufficiently conducive to a rally in equities. The second is a recent shift in the AI narrative, which has shaken our conviction that big-tech will drive up the index.

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