According to reports, economists at Wells Fargo, a US banking giant, are revising their S&P 500 outlook for this year due to the ongoing conflict in Iran.
Wells Fargo now predicts that the S&P 500 will end the year at 7,300, down from their previous forecast of 7,800. This would result in a gain of less than 7% for the index in 2026, as per Bloomberg.
The updated forecast represents an 11% increase from the current S&P 500 level, following a significant correction during the US-Iran conflict that began five weeks ago. The index is currently around 6,575 points.
Ohsung Kwon, the chief equity strategist at Wells Fargo, notes in a message to investors that he remains optimistic about stocks but highlights inflation as a major risk in the second half of the year due to the economic and market impacts of the war.
“We are now considering the potential risk that was not initially part of our projections for the year…
The challenges are growing with each passing day.”
Kwon also observes that investors seem to be hedging their investments rather than completely liquidating their positions, unlike in previous periods of market uncertainty.
On a different note, President Donald Trump’s recent comments about seeking an end to the conflict with Iran have helped stocks recover this week, despite the ongoing challenges in the Strait of Hormuz.
While many strategists have not adjusted their market forecasts made before the conflict, JPMorgan Chase has slightly revised its forecast. Additionally, Morgan Stanley’s Chief US Equity Strategist and Chief Investment Officer Mike Wilson believes that US stocks are nearing a bottom, and Barclays has raised its year-end S&P 500 forecast based on expected strong profit growth for companies, despite the war’s effects.
Follow us on X, Facebook and Telegram
Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Surf The Daily Hodl Mix
Generated Image: Midjourney
