Our monthly S&P 500 forecast for May is a 4.3 percent increase over the average of April 2025.
The model-based forecast takes into account the changes in oil prices and yield spreads. However, a forecast model cannot possibly capture the full impact of uncertainty caused by tariff wars and geopolitical tensions such as the war in Ukraine.
Our quarterly S&P 500 forecast for 2025 Q2 (average price returns) is a 1.7 percent drop over the first quarter. Our monthly forecast for May is higher than April’s average. The volatility concerning frequent changes in tariff rates and timings, and geopolitical problems such as the war in Ukraine cannot be captured in a forecast model. Thus, any uncertainty concerning these issues makes the 95 % confidence interval around the point forecast rather wide.
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