Yingtou Securities bucked the trend and sang down on US stocks! Second year of presidential tenance+new Federal Reserve chairman = “bad year” for the market S&P 500 will drop to 6,500 points by the end of next year

The Zhitong Finance App learned that Steve Sosnick (Steve Sosnick), chief strategist at Yingtou Securities, has set a year-end target of 6,500 points for the S&P 500 index. This forecast means that the stock index is down about 3% from current levels, which is much more cautious than the bullish predictions of other major Wall Street banks. The strategist explained his views on reverse investing and justified his conservative strategy by citing historical trends.

Historical data plays an important role in Sosnick's analysis, particularly the impact of the presidential term cycle. “There have only been two bear years in history, both in the second year of the presidential term,” he said. He used the “end of volatility” incident in February 2018 as an example to illustrate market turbulence in such a cycle.

At the same time, Sosnick expressed concern that the new chairman of the Federal Reserve often faces tests early in his term. He cited historical cases such as Alan Greenspan (who was hit by the 1987 stock market crash soon after taking office) and Ben Bernanke (facing a financial crisis at the beginning of his term), saying “new Federal Reserve presidents usually experience market tests around the first time they take office.”

In response to the current boom in artificial intelligence, Sosnick believes its sustainability is questionable. He warned that if there is a correction in the leading industry leading the recent rise, it will be difficult to make up for losses due to sector rotation alone. “These companies drive the market to a rapid upward trend, but if they experience any decline, even if they only stagnate, they will require huge capital rotation to offset the impact.”

Broadcom's recent market performance seems to confirm Sosnick's concerns. Despite strong earnings reports, stock prices have fallen significantly (currently down about 5%), indicating that even with stable fundamentals, individual stocks cannot escape the current market's adjustment pressure.

Sosnick also pointed out the special pattern of pre-market trading, calling the 4 a.m. Futures rally a “Pluto rebound” because it often lacks continuity during regular trading sessions. He speculated that due to lack of institutional sales during the holidays, this model may change or trigger different market trends.

It is worth mentioning that Yingtou Securities is one of the few major banks on Wall Street that are bearish on US stocks in 2026. Earlier, a number of major Wall Street banks successively released their forecasts for the 2026 S&P 500 index. Despite differences in target points, the general consensus is that US stocks are expected to continue to rise, driven by the continuation of the wave of AI investment, the shift in monetary policy easing, and the spread of profit growth.

UBS pointed out in a report released recently that the outlook for US stocks is still optimistic, supported by factors such as outstanding economic resilience, declining interest rates, and continued strong investment in the AI sector. UBS predicts that the S&P 500 index will reach 7,300 points in June 2026 and further climb to 7,700 points in December 2026.

Citi also stated in a recent report that it has set a year-end benchmark target of 7,700 points for the S&P 500 index based on core logic such as broadening corporate profit growth and deepening AI themes. Citi believes that US stocks are currently in their fourth year of a bull market, and fluctuations may be more intense than in 2025, but profit growth and policy support will still drive the overall upward trend in the market. However, Citi also pointed out that the target for the S&P 500 index is 8,300 points under an optimistic scenario, reflecting more aggressive profit growth and slightly higher valuation levels; under a pessimistic scenario, the target is 5,700 points, which corresponds to a situation where fundamentals fall short of expectations and valuation compression.

Earlier, J.P. Morgan Chase set a target of 7,500 points for the S&P 500 index at the end of 2026. At the same time, it was pointed out that if the Federal Reserve continues to cut interest rates, this benchmark index is expected to break through 8,000 points in the next year. Deutsche Bank has set an S&P 500 target of 8,000 points by the end of 2026. The bank's confidence stems from its expectations that profit growth will “spread”. Deutsche Bank stock strategists predict that earnings per share of the S&P 500 will increase sharply by 14% to $320 next year. The bank believes that the growth momentum brought by AI will break through the category of the “Big Seven US stocks” and spread to a wider range of market sectors such as financial stocks and cyclical sectors, thus driving a round of bullish market coverage with wider coverage.

Morgan Stanley is also optimistic. It is expected that the S&P 500 index will rise to 7,800 points over the next year. HSBC has set a target point of 7,500 points for the S&P 500 at the end of 2026. Driven by the AI investment boom, the index is expected to achieve a second consecutive year of double-digit growth. Barclays targets 7,400 points for the S&P 500 at the end of 2026, saying that despite weak macroeconomic growth, large technology stocks are showing strong performance, and the monetary and fiscal environment continues to improve.