Bank of America predicts that the S&P 500 could experience a 12% decline if a recession occurs, potentially dropping to 5,000 in a bear case scenario. Concerns about a possible economic downturn due to tariff uncertainties and growth worries have been weighing on Wall Street. The bank suggests that investors preparing for a recession should be ready for a substantial stock market correction. Bank of America's strategists foresee the S&P 500 falling to around 5,000 should unemployment rise and the economy enter a downturn, representing a 12% decrease from current levels. Despite these concerns, the bank's base case scenario remains optimistic, with projections of the index trading between 5,885 and 6,175 by year-end, indicating potential upside of up to 7%. The likelihood of a recession is becoming more prominent among forecasters on Wall Street as economic data weakens and tariff impacts are feared. Recession odds are climbing, with a median market-implied probability of 33% across various asset classes and sectors, up from essentially 0% in November. Additionally, the GDP is forecasted to contract by 1.8% this quarter based on the latest Atlanta Fed GDPNow reading. To address these concerns, experts recommend reducing overall portfolio risk and increasing defensive sector exposure in equity while favoring fixed income over stocks.