Two leading market forecasters — Bob Doll and Jeremy Siegel — issued commentaries Monday suggesting that stocks could experience another drop given tariff policy uncertainties and other economic forces.
Doll, Crossmark Global Investments' CEO and chief investment officer, noted the S&P 500's recent 10% decline from a February all-time high, attributing it to uncertainty over tariffs, inflation, taxes, government cuts, jobs and spending — especially tariffs — and to overvaluation.
In his weekly investment commentary Monday, Doll noted that the S&P 500 has erased its gains since September, when then-candidate Donald Trump started climbing in the polls, "suggesting the market is shifting toward economic weakness fears. A vicious rally — 3-5% — is likely given the oversold conditions, but equally likely is a re-test of the lows."
The Crossmark leader reiterated the prediction in a special market commentary later in the day.
"It will take time for the market to 'heal' and time to reduce the uncertainty levels. We will likely witness rallies and subsequent pull-backs," Doll wrote, adding that companies probably will have to cut earnings estimates to reflect the slowing economy.
The longer that uncertainty and tariff actions persist, the higher the recession risk, according to Doll, who wrote that heightened uncertainty is eroding consumer and business confidence and spending plans.
While recent market turmoil may create good buying opportunities in equities, he said, for that to pan out, the United States must pivot to significantly lower trade uncertainty and toward more pro-growth policies.
Siegel, in his weekly commentary, said that valuations are elevated but reasonable and urged investors to stay the course, while noting potential for further drops.
"The correction I predicted at the start of the year played out, with the S&P 500 officially down over 10% at one point," wrote Siegel, the WisdomTree and Wharton School economist.
"Whether we see further declines will depend almost entirely on how the tariff situation unfolds. If Trump continues escalating, we could see another leg down, possibly pushing the market toward a bear market — down 20%. However, if he signals any moderation, markets could stabilize and rebound," he added.
Pictured: Bob Doll ; photo courtesy Crossmark Global Investments
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