Bank of America strategist Savita Subramanian set the target for the S&P 500 for the next 12 months at 7,800 points, with only about 2% room to rise from the current level, and raised the target level from 7,100 points to 7,400 points at the end of this year, which means there is still about 3% downside compared to the current level. The bank believes that the risk of a short-term pullback in US stocks is rising. Since this year, the S&P 500 has only experienced a 5% retracement once, while the historical average is about three times a year. At the same time, about half of the bear market warning indicators it tracks have already been triggered. The Bank of America pointed out that inflation, the Federal Reserve's policy, profit quality, and the credit environment are still the main risks. Currently, the level of inflation implied in market valuations is significantly lower than the bank's forecast. However, the bank still maintains a long-term bullish view, believing that replacing part of the labor force by enterprises through automation and large-scale processes will drive productivity growth. Bank of America expects earnings from S&P 500 components to increase 33% in 2026 and 12% in 2027, and is more optimistic about large-cap value stocks, some small and medium capitalization stocks, and the weighted S&P 500 index.

Bank of America strategist Savita Subramanian set the target for the S&P 500 for the next 12 months at 7,800 points, with only about 2% room to rise from the current level, and raised the target level from 7,100 points to 7,400 points at the end of this year, which means there is still about 3% downside compared to the current level. The bank believes that the risk of a short-term pullback in US stocks is rising. Since this year, the S&P 500 has only experienced a 5% retracement once, while the historical average is about three times a year. At the same time, about half of the bear market warning indicators it tracks have already been triggered. The Bank of America pointed out that inflation, the Federal Reserve's policy, profit quality, and the credit environment are still the main risks. Currently, the level of inflation implied in market valuations is significantly lower than the bank's forecast. However, the bank still maintains a long-term bullish view, believing that replacing part of the labor force by enterprises through automation and large-scale processes will drive productivity growth. Bank of America expects earnings from S&P 500 components to increase 33% in 2026 and 12% in 2027, and is more optimistic about large-cap value stocks, some small and medium capitalization stocks, and the weighted S&P 500 index.