Analysts warn that the S&P 500 could plummet as low as 3,700 this year, even without a full-blown recession. Chris Senyek, chief investment strategist at Wolfe Research, predicts a potential decline ranging from 3,700 to 4,100 if economic growth slows down. This represents a significant drop of around 37% to 30% from its current level. This follows the S&P 500’s already substantial fall of over 7% in 2023, and it currently sits 11% below its peak reached earlier this year. The market entered a bear market after President Trump imposed tariffs last month, leading to a stagnant period since then. Earnings expectations have been impacted by recession fears, with Senyek anticipating a potential drop of 15% in S&P 500 earnings per share (EPS) if the U.S. falls into a recession. This is consistent with historical trends observed during past downturns. 76% of companies on the S&P 500 have beaten earnings expectations, exceeding analysts’ forecasts. However, experts predict a significant decline in price-to-earnings ratios if the market continues to weaken.