LIVE MARKETS-RBC cuts S&P 500 year-end target to 6,200

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RBC CUTS S&P 500 YEAR-END TARGET TO 6,200

Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, lowered the brokerage's year-end target for the benchmark S&P 500 index .SPX to 6,200 from its previous target of 6,600, an upside of ~10% from last close.

"While we don’t believe that a pullback beyond the 10% drawdown that has already been sustained is inevitable, we do believe that the path for stocks between now and December has gotten rockier with stronger headwinds," Calvasina said in a research note.

The benchmark S&P index confirmed a correction last week and finished Thursday more than 10% below its February record close after U.S. President Donald Trump threatened to impose a 200% tariff on European wine and spirit imports.

The brokerage also lowered its earnings forecast for the index by 2.5% to $264, citing stronger U.S. dollar impacts and some company conservatism around Trump's tariff developments.

Calvasina notes, with tariff policy constantly evolving and coming in much broader than most companies and investors had been anticipating, it would be difficult for company margins to expand.

Against the tariff backdrop, the once-resilient U.S. labor market is cooling, inflation is edging lower, consumer sentiment has plunged, spending has fallen and surveys suggest business activity has nearly stalled.

According to Calvasina, the U.S. equity market is at a fork in the road and the path it travels' relies on the policy narrative, how hard data comes in, as well as the results and commentary from companies in their Q1 reporting season.

(Kanchana Chakravarty)

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