Svmuu According to strategists from major Wall Street banks, their bullish case for U.S. equities remains intact despite risks stemming from the war in Iran. Rising oil prices, cost-of-living concerns, and uncertainty over the Federal Reserve's interest rate outlook have driven the S&P 500 Index (SPX) to its worst two-week performance since the tariff turmoil of last April. Nevertheless, strategists from Goldman Sachs Group, Morgan Stanley, and JPMorgan Chase point out that earnings growth and valuations provide support; while valuations remain high, they are not as extreme as before. Wilson's base-case year-end target for the S&P 500 Index is 7,800 points, implying approximately 18% upside from last Friday's close. Goldman's Snider expects the benchmark index to rebound to 7,600 points.
As the war enters its third week, a sharp rise in crude oil has pushed up U.S. Treasury yields and dampened bets on Fed rate cuts due to heightened inflation concerns. The Strait of Hormuz has become a focal point, with any prolonged disruption likely to intensify market worries about a deepening of global economic risks from the conflict. Despite this, U.S. equities have so far seen only a modest pullback since the outbreak of the Iran war, with less than 20% of developed market stocks in a technically oversold condition. (Jin10)