Two influential Wall Street strategists are asserting that the S&P 500 has likely found its low, even as a U.S. naval blockade of the Strait of Hormuz creates the potential to reverse some of the equity gains seen recently.
RBC Capital's view
RBC Capital Markets' head of U.S. equity strategy, Lori Calvasina, reiterated a 12-month S&P 500 price target of 7,750 in a note published on Monday. That target implies approximately 13.6% upside from the close on April 9. Calvasina described the index as having established a "fragile, foggy bottom," adding that the S&P 500 has remained inside what she classifies as a garden-variety pullback of less than 10% from its January high.
Calvasina emphasized that broad-based recession fears have not materialized, and she outlined conditions under which she believes the low is secured: "As long as recession fears remain low, investors remain convinced the war will end soon, and earnings expectations don't take too much of a hit, we think the low is in," she wrote.
On positioning, Calvasina noted a modest tilt toward large-cap growth over value, said she is "nibbling" on small caps, and reported no strong directional preference between U.S. and non-U.S. equities at the present time.
Wolfe Research's view
Chris Senyek, strategist at Wolfe Research, was similarly emphatic, stating that "the bottom of 6,343 is in for the S&P 500." Senyek recommended that investors consider adding to risk exposures if market weakness is prompted by the most recent geopolitical developments.
Senyek pointed to the start of first-quarter earnings season as a proximate test for the market, highlighting that a growing portion of S&P 500 growth is being driven by technology and semiconductors. He warned that earnings misses or weaker guidance from those sectors could trigger wider investor concern.
Outlook and near-term focus
Both strategists frame the market's resilience as conditional: continued low recession fears, contained fallout from geopolitical tensions, and stable earnings expectations are key. The upcoming earnings reports, especially from technology and semiconductor companies, represent a critical near-term check on those assumptions.
Key points
- RBC's Lori Calvasina maintains a 12-month S&P 500 target of 7,750, implying roughly 13.6% upside from the April 9 close.
- Wolfe Research's Chris Senyek says the bottom of 6,343 for the S&P 500 is in and advises adding to risk on geo-driven dips.
- Technology and semiconductors are central to near-term market dynamics as earnings season begins.
Risks and uncertainties
- Geopolitical - The U.S. naval blockade of the Strait of Hormuz could reverse recent market gains and prompt volatility.
- Earnings risk - Disappointments in first-quarter results or guidance from technology and semiconductor firms could spread to broader equity sentiment.
- Economic risk - A wider emergence of recession fears would undermine the strategists' conditions for the market low holding.