Finance
HSBC downgrades US stocks, turns bullish on European equities
Published by Global Banking & Finance Review®
Posted on March 10, 2025
2 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on March 10, 2025
2 min readLast updated: January 24, 2026
HSBC downgrades US stocks due to trade uncertainty, while European equities gain favor following Germany's fiscal reforms.
(Reuters) - HSBC on Monday downgraded U.S. equities, citing uncertainty around tariffs, while turned bullish on European stocks following boost from Germany loosening its fiscal reforms.
The brokerage lowered U.S. equities to "neutral" and raised rating on European stocks, excluding UK stocks to "overweight" from "underweight."
The Trump administration's massive moves on trade and other policies have injected uncertainty, while a proposed $1.2 trillion European fiscal bazooka and the emergence of China as the tech race leader are marking a potential turning point for investor capital away from the United States.
The S&P 500 has pulled back about 6.1% from its February 19 record high on worries that the trade war will hurt corporate profit and slow growth.
"It is important to stress that we are not turning negative on US equities - but tactically, we see better opportunities elsewhere for now," said HSBC's Global Equity Strategist Alastair Pinder said.
Morgan Stanley Equity Strategist Michael Wilson believes the S&P 500 could fall another 5% to 5,500 points by mid-year, before ending the year at around 6,500, which is a 12.7% upside from the benchmark index's last close.
"The path is likely to be volatile as the market continues to contemplate these growth risks, which could get worse before they get better," Morgan Stanley's Wilson said in a note on Monday.
(Reporting by Kanchana Chakravarty and Medha Singh in Bengaluru; Editing by Shinjini Ganguli)
HSBC downgraded U.S. equities to 'neutral' due to uncertainty around tariffs.
HSBC raised its rating on European stocks, excluding UK stocks, to 'overweight' from 'underweight.'
The uncertainty is primarily due to the Trump administration's trade policies and proposed tariffs.
Morgan Stanley's Michael Wilson believes the S&P 500 could fall another 5% to 5,500 points by mid-year.
Alastair Pinder stated that while they are not turning negative on US equities, they see better opportunities elsewhere for now.
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