The great instances for the inventory market won’t final lengthy, if Stifel is right in its evaluation. Strategist Barry Bannister stated in a observe Sunday he expects the S & P 500 to fall 12.4% to five,500 within the second half of the yr. His feedback got here after the benchmark index made contemporary file highs final week, closing Thursday, earlier than the July 4th vacation, at 6,279.35. “We count on U.S. Core GDP to gradual sharply in 2nd half 2025E, which has lengthy been related to S & P 500 corrections,” Bannister wrote. “We see slower 2H25 U.S. Core GDP as consumption slows as a consequence of weaker actual employment revenue and falling capex.” Bannister expects year-over-year consumption progress to ease to lower than 1% within the second half, resulting in a steep pullback within the S & P 500. .SPX YTD mountain SPX yr up to now “The correction we count on happens regardless of Tech being extra worthwhile than within the ’90s Bubble … over-valuation is the problem,” he stated. “The surroundings we count on of slowing Core GDP with sticky inflation favors a reprise, primarily a ‘market echo,’ of the ‘stagflation commerce’ which is what out-performed within the 1Q 2025 correction.” Bannister’s name comes because the U.S. goals to strike commerce offers with different international locations. The White Home over the weekend prolonged a deadline for different nations to succeed in an settlement with the U.S. to Aug. 1 from July 9. Commerce tensions have grown this yr because the Trump administration imposes financial protectionism, elevating concern that inflation and Federal Reserve lending charges will keep excessive. Fed Chair Jerome Powell stated final week that the central financial institution would have lower charges by now had it not been for Trump’s tariffs. “In impact, we went on maintain after we noticed the scale of the tariffs and primarily all inflation forecasts for america went up materially as a consequence of the tariffs,” Powell instructed a central financial institution discussion board in Europe. Stifel’s Bannister stated on this market local weather he prefers shopper staples, utilities and health-care tools shares.