The S&P 500 could fall to 5,000 points by the end of 2027, representing a decline of more than 35 per cent from its latest closing level, British brokerage Panmure Liberum has warned.
The forecast comes as US stocks continue to trade near record highs despite persistent inflation, elevated bond yields and higher interest rates. The S&P 500 has gained 12.8 per cent this year and has extended a bull market that began in October 2022.
Panmure analyst Joachim Klement said the combination of higher bond yields and interest rates could bring the current equity rally to an end sooner than investors expect. He said strong corporate earnings and resilient economic data have continued to support share prices, but upcoming third-quarter earnings and companies’ forecasts for 2027 will provide an important test of that strength.
The brokerage is also forecasting declines in European markets, with the STOXX 600 expected to fall to 430 points and the UK’s FTSE 100 to 8,260 by the end of 2027.
Panmure’s outlook contrasts sharply with forecasts from other brokerages that expect the S&P 500 to reach or exceed 8,000 points by the end of 2026.
The warning comes as investors remain focused on interest rates, rising energy costs and whether heavy spending on artificial intelligence can continue to support corporate earnings and market valuations.
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