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S&P 500 could plunge 20% in coming months as recession hits, BofA warns
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The stock market could face another tumultuous year in 2023, with the S&P 500 experiencing a dramatic correction if the U.S. tumbles into a recession, according to Bank of America strategists.
In a Monday analyst note, the strategists warned the benchmark index could fall as low as 3,240 points, or about 20%, from current levels if the U.S. enters a recession in coming months.
"History suggests that if the U.S. economy experiences a recession, the SPX bottoms out during the recession and not before," the note said. "Only the March 1945-October 1945 recession saw the SPX rally ahead of and throughout the recession."
The S&P has already plummeted about 16% this year as investors weigh concerns about stubbornly high inflation, steeper interest rate hikes and the likelihood of an economic downturn next year. But the Bank of America strategists warned on Monday there could be further declines ahead for the market.