The S&P 500, which returned nearly 27% to investors last year, has been dragged down more than 15% year to date by rising interest rates, geopolitical tensions, persistent inflation, and a number of other bearish factors.

The big question on most investors’ minds: How much further will stocks drop?

Bank of America’s chief investment strategist Michael Hartnett has looked backward, and he has a hibernation outlook. Based on historical bear market trends, he said, there could be months of pain ahead.

“In the last 19 bear markets, the average peak to trough decline has been 37% with an average duration of 289 days. If history were to repeat then today’s bear market ends in October 2022 with the S&P at 3000,” Bank of America Research analysts wrote in a Sunday note.

If that bears out, it means the S&P 500 still has another roughly 25% downturn ahead of it from current levels.

“Bear markets are quicker than bull markets”

Hartnett noted that in the past 25 years, the NYSE composite has always fallen significantly below its 100-week moving average during bear markets, but this year the index is trading just barely below that level, which could mean more downside lies ahead.

While about half of the stocks in tech-heavy Nasdaq are down 50% or more from their peaks, and many speculative assets in the cryptocurrency space have seen sharp drawdowns in recent weeks, Hartnett argues Wall Street will spend much of the year working through an “inflation shock,” a “rates shock,” and a “recession shock” that will lead to negative returns and increased volatility.

The “good news is bear markets are quicker than bull markets,” he said.

The investment strategist added that while many investors have sought protection in commodities since the start of the year, he believes these holdings should be sold moving forward “given recession risk.” 

Hartnett isn’t bullish on the tech space, either, arguing that more speculative tech stocks will remain in a bear market for the next two years, even if the S&P 500 bottoms out. A floor does not equal a new bull market for tech stocks, he said.

The investment strategist isn’t alone in calling for stocks to fall amid a U.S. recession either. From billionaire investors to top investment banks, recession fears are spreading on Wall Street. 

Jamie Dimon, the CEO of JPMorgan Chase and one of the most powerful voices in finance, argued there’s only a 33% chance the Federal Reserve can ensure a “soft landing” for the U.S. economy—in which rising inflation is tamed, but a recession is avoided—in an interview with Bloomberg on Wednesday. And Deutsche Bank said in April that it believes a “major” recession will come by 2023.

Even former Fed officials have begun sounding the alarm, with former Fed Chair Randal Quarles saying in an interview last week that a recession is likely, “given the intensity of inflation.”