JPMorgan's trading desk has shifted to a tactically bearish stance on U.S. equities, citing escalating tariffs imposed by President Donald Trump as a key factor. The firm expects these tariffs, including 25% levies on steel and aluminum imports, to weigh on economic growth both domestically and internationally, potentially leading to a significant downgrade in U.S. GDP growth expectations and earnings revisions. First-quarter earnings growth estimates have already been revised down to 7.1% from 11%, according to Bloomberg Intelligence data. The Federal Reserve Bank of Atlanta's GDPNow forecast also suggests a potential contraction in the U.S. economy. JPMorgan anticipates that the ongoing trade tensions and lack of resolution could force Wall Street to revisit year-end forecasts for the S&P 500 Index, which recently declined 0.6%. JPMorgan noted that the tariffs could push Canada and Mexico into a recession and have already contributed to a $3 trillion loss in U.S. equities since President Trump's election. While the firm clarified that a U.S. recession is not its base case scenario, it warned that the accelerating trade war is likely to further challenge U.S. equities, with sectors ranging from small-cap stocks to major technology firms experiencing losses.