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April 3 - The S&P 500 might be heading for a bigger pullback, thanks to President Donald Trump's recent tariff move, according to RBC Capital Markets. They're warning that if the index falls below its mid-March low, it could dip into the 4,900-5,300 range, marking a 14-20% drop from February's high.
Lori Calvasina, RBC's head of U.S. equity strategy, pointed out that the tariffs were more widespread and severe than the market first expected. What started as talk of a 10% tariff quickly grew to higher rates, affecting not just China, but also the EU and Vietnam.
While there are some positives, like no new tariffs on Mexico and Canada and a short window for talks before the new tariffs hit on April 9, the market isn't convinced. Small-cap stocks took the biggest hit, showing that investors are worried about the impact on U.S. economic growth.
At this point, fears of a growth scare correction are still looming. RBC's lower year-end target of 5,500 seems more likely, with the 6,200 target looking uncertain
This article first appeared on GuruFocus.