Analysts at Morgan Stanley on Monday cut their outlook on large- and mid-capitalization banks to "in-line" from "attractive," writing that President Donald Trump's tariffs are increasing recession risks.

In their note on large-cap banks, Morgan Stanley analysts led by Betsy Graseck wrote that while their base case is for a "significant" gross domestic product (GDP) slowdown, 澳洲幸运5官方开奖结果体彩网:recession risks have surged. The slower GDP growth, coupled with increasing 澳洲幸运5官方开奖结果体彩网:economic uncertainty, is set to "push out the nascent capital markets rebound, incrementally slow lo♍an growth, and drive net charge offs across consumer and commercial loans," they wrote. 

They said that American consumers, who drive U.S. GDP growth, "do not have  savings levels to absorb these tariffs and continue spending at pre-tariff levels."

Analysts Downgrade Goldman, Upg🧜rade Bank of Ameꩲrica

The analysts also 澳洲幸运5官方开奖结果体彩网:downgraded Goldman Sachs (GS) to "equal-weight" from "overweight," saying the Wall Street powerhouse is the most exposed to 澳洲幸运5官方开奖结果体彩网:investment banking revenue, which is more vulnerable "to recession risk and deteriorating market conditions" than that of traditional commercial banks. They upgraded Bank of America (BAC) to "overweight" from "equal-weight," citing cheap 澳洲幸运5官方开奖结果体彩网:valuations.

Shares of Goldman Sachs slippe🐻d nearly 1% intraday, while those of Bank of Americ🦂a are up 2.7%.

Meanwhile, Morgan Stanley analysts led by Manan Gosalia downgraded midcap banks, "as higher and faster than expected tariffs raise recession risks, weigh on loan growth and in-turn, forward EPS and 澳洲幸运5官方开奖结果体彩网:multiples."