Capital Economics forecasts a more than 15% decline in the S&P 500 by the end of 2025, pushing the index down to 6,500. Last week, the Nasdaq Composite posted its worst weekly performance since June, falling more than 4%, while the iShares Semiconductor ETF declined for nine consecutive days, the longest stretch in 20 years. This weakness stems from concerns over a potential memory chip oversupply and AI-related companies taking on excessive debt to finance their buildouts. Conversely, bonds are expected to benefit, with the 10-year Treasury yield projected to fall to 4.25% by the end of 2027, from approximately 5.12% on Tuesday. This bearish outlook contrasts with other market participants, such as Wells Fargo and Goldman Sachs, which believe recent selling pressure was overdone.
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