(Bloomberg) -- Wall Street forecasters are turning ice cold on US equities, telling investors to refrain from buying the selloff as President Donald Trump’s historic trade war raises the specter of recession.

Bank of America Corp.’s Michael Hartnett became the latest to recommend investors “short” risk assets until the Trump administration pivots away from tariffs and toward tax cuts, higher energy supply, deregulation and an aggressive increase in the debt ceiling.

The strategist said that in the event of a recession, investors should wait for the S&P 500 Index to slump between 4,800 and 5,000 points “to go all-in on risk.” The low end of that range implies a drop of another 11% from Thursday’s close.

UBS Global Wealth Management’s Mark Haefele had earlier cut his rating on US stocks to neutral and slashed his year-end target for the S&P 500 by 9%, warning of more market volatility. Legendary investor Bill Gross also urged prospective dip-buyers to stay on the sidelines.

The S&P 500 sank 4.8% on Thursday in the biggest selloff since June 2020. The dollar has erased all of its gains since Trump won the presidency in November, and even the Russell 2000 index of small-cap stocks — which had earlier been touted as a winner from the president’s protectionist agenda — plunged into a bear market. European and Asian equities have also tumbled after outperforming the US in the first quarter.

With China retaliating against US tariffs with a slew of measures including new levies, traders showed little appetite to return to stocks on Friday. S&P 500 futures sank 3.4%, while in Europe, the Stoxx 600 Index plunged 5.4%.

Volatile Markets

Haefele, the chief investment officer at UBS Wealth, said markets are likely to be “particularly volatile” as countries respond with tit-for-tat tariffs, leading to further earnings and growth downgrades.

He now expects the S&P 500 to end the year around 5,800 points —implying a gain of about 7% from Thursday’s close — compared with his earlier estimate of 6,400.

“Higher tariffs and lower growth will mean pressure on US corporate earnings, while continued uncertainty, weakening economic data, and the Trump administration’s apparent willingness to tolerate economic downside will mean that risk premia are likely to stay elevated,” Haefele wrote in a note.

Other strategists including at Goldman Sachs Group Inc. and Societe Generale SA have also cut their projections for the S&P 500 in recent days. But Ed Yardeni of eponymous firm Yardeni Research has emerged as a rare voice advocating for US stocks.

A “great buying opportunity is being created here,” the Wall Street veteran said in a Bloomberg TV interview. “The market is giving a big thumbs down to this tariff policy.”

Yardeni — who had reduced his own target for the benchmark twice last month — expects the Trump administration to face pressure and political backlash, with a growth slowdown that may even factor into the midterm elections in 2026.

Trump is going to “back off in a way that he can declare” a victory with some concessions from US trading partners in the next three to six months, Yardeni said.

--With assistance from Michael Msika.

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