In the latest update, Morgan Stanley analysts have warned that the S&P 500 may drop to 4,700, marking a further 7%-8% decrease from the close on Friday. This possible decrease is contingent on President Donald Trump maintaining his tariff agenda or the Federal Reserve opting not to reduce interest rates. Despite the index closing at 5,074.08 on Friday, a 9% drop throughout the week, concerns persist as Trump has not signaled any retreat from his tariff plans and the Fed has chosen to maintain current interest rates. The analysts had initially identified a support level for the S&P 500 at 5,100-5,200, but the recent market trend has prompted them to focus on a potential area of support near the 200-week moving average, or around 4,700. With valuations offering more support at that level, investors need to be ready for a potential further decline of 7-8% from the Friday close, if trade conditions do not improve and the Fed sustains its current stance. Fed Chair Jerome Powell highlighted concerns on inflation and economic growth due to Trump's elevated tariffs.