Wall Street Is Slashing Stock Market Targets Over the Iran War. They've Been Wrong 5 of the Past 6 Years.

By Johnny Rice – Apr 19, 2026 at 1:15AM ESTKey PointsIn the wake of the Iran war, major Wall Street firms including JPMorgan Chase and Wells Fargo slashed their S&P 500 price targets -- but history suggests these forecasts often miss the mark.In five of the past six years, Wall Street significantly underestimated where the market finished, missing by as much as 28% to the upside.While the risks to the global economy are real, investors who stick it out usually come out ahead -- and in the long run, they always do.While the market has reversed course in recent weeks, it remains to be seen where the S&P 500 (^GSPC +1.20%) will end up at year's end. Wall Street's perfomance has been mixed, but in the wake of the Iran war, much of the Street has been slashing its price targets. JPMorgan Chase cut its forecast, saying the conflict means a "more constrained" upside. Wells Fargo followed a few days later, trimming its target from 7,800 to 7,300, and several other firms have dialed back expectations as well. Image source: Getty Images. It makes sense, with oil prices elevated -- the effects of which are only beginning to be felt -- and consumer confidence hitting record lows, it's easy to believe the market will underperform this year. But history has a lesson for investors who put too much stock in Wall Street's targets. Let's look at how accurate these forecasts have actually been -- and what patterns emerge. Wall Street's forecasting track record isn't great Here's the track record: YearConsensus TargetActual Year-End CloseDifference2020~3,3003,75614%2021~4,1004,76616%2022~4,9503,840(22%)2023~4,0504,77018%2024~4,7205,88125%2025~6,6006,8464% Data sources: macrotrends.net, Avantis Investors. The pattern is striking: In five of the past six years, Wall Street significantly underestimated where the market actually finished -- in some cases by nearly 30%. The lone exception was 2022, when a bear market driven by a rapid rise in interest rates caught nearly everyone off guard. So in general, Wall Street tends to miss on the low side. That's worth remembering when you see another downward revision. Why 2026 could be different The 2026 setup has echoes of April 2025, when the market reacted to massive tariffs from the Trump administration. These were significantly scaled back relatively quickly, and the market dip was short-lived. Of course, there's plenty of reason to believe this might be different. While there has been diplomatic progress and a deal might soon be reached, the flow of oil and natural gas through the Strait of Hormuz could be affected for months to come, if not longer. Critical infrastructure throughout the area has already been destroyed, and shipping rates are likely to be elevated for some time, even if a peace deal is reached. Operators will be wary of a re-escalation. If a deal isn't reached and the waterway remains shut for months, a global recession would be hard to avoid. At the end of the day, you have to take any prediction with a heavy grain of salt, even if it is from Wall Street. And while the risks to the global economy are very real, investors who stick it out usually come out ahead in the short term. In the long run, they always do. For those of us who lack a crystal ball, time in the market will always beat timing the market.Read NextApr 18, 2026 •By Adam LevyBillionaire Bill Ackman Is Planning to Invest $10 Billion in New Stocks This Summer. Here's Why He Thinks It's a Great Time to Buy.Apr 18, 2026 •By Sean WilliamsA Potential Worst-Case Scenario Is Setting Up for the Stock Market on May 15 -- and There's No Sweeping This Under the RugApr 18, 2026 •By Katie BrockmanExperts Warn That Recession Risks Are Increasing. Here's What That Means for InvestorsApr 18, 2026 •By Sean WilliamsThe Probability of a Stock Market Crash Under Donald Trump Is Climbing -- and the Blame May Lie With the President HimselfApr 17, 2026 •By Adam SpataccoThe Stock Market Sounds an Alarm for the First Time in 25 Years. Here's Where History Says the S&P 500 Is Headed Next.Apr 17, 2026 •By Emma NewberyStock Market Today, April 17: Oil Prices Drop As Strait of Hormuz ReopensAbout the AuthorJohnny Rice is a contributing writer for The Motley Fool covering tech stocks. He previously contributed to various financial publications.TMFJohnnyRiceStocks MentionedS&P 500 IndexSNPINDEX: ^GSPC$7,126.06(+1.20%)+$84.78JPMorgan ChaseNYSE: JPM$310.29(+0.11%)+$0.34Wells FargoNYSE: WFC$81.41(+0.20%)+$0.16*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.