S&P 500 nears correction as stock sell-off deepens amid Trump’s latest tariff threats
The recent turmoil in the stock market due to tariff-related concerns has caused the S&P 500 to drop by about 5% year to date. This has left many investors feeling uneasy, but it’s important to remember that pullbacks of 5% to 10% in the benchmark index are not uncommon.
According to Jeff Buchbinder, chief equity strategist at LPL Financial, the S&P 500 typically experiences three drawdowns of between 5% and 10% each year. In fact, there has been at least one 5% pullback in 94% of years dating back to 1928. Buchbinder’s advice to investors is clear: “Be patient, stay invested, and most importantly, don’t panic.”
Stocks also tend to experience a correction of over 10% once a year, even in favorable years. With no corrections in 2024, a pullback was expected. Despite the recent volatility, stocks have historically delivered an average annual return of 13% since 1980.
Looking ahead, Buchbinder has set a year-end price target for the S&P 500 in a range from 6,275 to 6,375, in line with other Wall Street expectations.
It’s important for investors to keep a long-term perspective and not let short-term fluctuations derail their investment strategy. By staying patient and focused on their goals, investors can weather the storm and potentially benefit from the market’s long-term growth.
