--- title: "Wall Street investment banks ignore the gunfire and inflation, firmly optimistic about the rise of U.S. stocks this year" type: "News" locale: "en" url: "https://longbridge.com/en/news/277622011.md" description: "Wall Street bulls are optimistic about the rise of U.S. stocks in 2026, despite the S&P 500's lackluster performance in the first two months of this year. Analysts believe that the market continues to show resilience despite challenges such as geopolitical turmoil and inflation. Bank of America's strategists maintain their asset allocation weight and expect the S&P 500 to rise by 10% in December. Analysts suggest that any market pullback related to Iran is a buying opportunity" datetime: "2026-03-03T12:40:04.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/277622011.md) - [en](https://longbridge.com/en/news/277622011.md) - [zh-HK](https://longbridge.com/zh-HK/news/277622011.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/277622011.md) | [繁體中文](https://longbridge.com/zh-HK/news/277622011.md) # Wall Street investment banks ignore the gunfire and inflation, firmly optimistic about the rise of U.S. stocks this year According to Zhitong Finance APP, in the first two months of this year, the S&P 500 index showed no signs of improvement. However, considering the shocks the market has faced, from geopolitical turmoil to the disruptive threats posed by artificial intelligence, the U.S. stock market can be considered resilient. Yet, this is far from Wall Street's bullish expectations for the benchmark index's performance by the end of 2026. Despite numerous potential headwinds, the average target price for the S&P 500 at the close in December is still projected to rise 10% from current levels, consistent with expectations at the beginning of the year. According to Bank of America's sell-side sentiment indicator, strategists have also maintained their asset allocation weights unchanged. Their optimism stems from expectations of above-average U.S. economic growth and corporate earnings growth. Moreover, although it is still early to draw conclusions, since the U.S. launched a war in the Middle East, institutions tracking all strategists have not become cautious. This war has currently pushed energy prices higher. ![ce798ec94f56bbedacc658b099b7f6bc.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260303/1772540777625582.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Sameer Samana, head of global equity and real assets at Wells Fargo Investment Institute, stated, "The key lies in the fundamentals of the macro economy and corporate earnings, and so far, geopolitics does not seem to have impacted them. The Iran conflict is different from other conflicts; if oil prices remain high for several months or quarters, it could threaten the global economy and corporate earnings." The war between the U.S. and Iran is just the latest blow to investor confidence this year: persistent inflation and changing tariff policies make it difficult for companies to plan, the application of artificial intelligence could disrupt multiple industries, private credit companies are struggling under the pressure of bad loans, and Trump's ambitious foreign policy has left both U.S. allies and adversaries feeling uneasy. On Monday, analysts advised clients that any market pullback related to Iran would be a good buying opportunity. Companies from Morgan Stanley to Piper Sandler & Co. have reiterated their optimistic views on the stock market, citing examples of past geopolitical turmoil, noting that these upheavals typically last for a short duration. On Monday, the S&P 500 index closed nearly flat, erasing an early 1.2% decline. Some believe this optimism is misplaced. ![df4ed0a7244b108b38936026796297b6.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260303/1772540824752207.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Matt Maley, chief market strategist at Miller Tabak + Co LLC, stated, "This complacency has reached an incredible level. We have reached a point where investors will buy the dip until this strategy fails. The problem is that when the inevitable pullback finally comes, many investors will suffer heavy losses." According to Savita Subramanian, head of equity and quantitative strategies at Bank of America, despite changes within the market, "the once-thriving growth sectors have sharply downgraded," but stock market sentiment "remains robustly optimistic" this year. Despite various short-term concerns, strategists' bullish views are still based on the premise that the profit engine of U.S. companies is sufficient to continue driving the stock market higher. However, during the recent earnings season, strong financial data—S&P 500 constituent companies' profits grew by 13%, nearly 6 percentage points above expectations—was not enough to boost stock investors' confidence. From the time JPMorgan Chase released its earnings report to Walmart's performance announcement, the S&P 500 fell by 1.7%. Moreover, another dangerous signal has emerged in the market. Alternative investment management firm Blue Owl Capital (OWL.US) recently suspended redemptions for one of its funds and began selling loans to raise capital. The company warned that increasing pressure on borrowers, rising interest costs, and the leverage effects left over from the low-interest-rate era are beginning to exert pressure on parts of the private credit market. For stocks, this means that credit tightening and potential defaults could impact corporate earnings, especially in highly leveraged industries. Maley stated, "Everyone thinks that whether it's the Federal Reserve's policy adjustments or Trump's policy adjustments, they can prevent even the slightest decline, which is a big mistake. Sooner or later, any of these issues will lead to a decline in profit expectations, which will cause severe panic among investors." ### Related Stocks - [The Financial Select Sector SPDR® ETF (XLF.US)](https://longbridge.com/en/quote/XLF.US.md) - [Bank of America Corporation (BAC.US)](https://longbridge.com/en/quote/BAC.US.md) - [S&P 500 (.SPX.US)](https://longbridge.com/en/quote/.SPX.US.md) - [iShares Core S&P 500 ETF (IVV.US)](https://longbridge.com/en/quote/IVV.US.md) - [Vanguard S&P 500 ETF (VOO.US)](https://longbridge.com/en/quote/VOO.US.md) - [SPDR® S&P 500® ETF (SPY.US)](https://longbridge.com/en/quote/SPY.US.md) ## Related News & Research - [Iran parliamentary speaker: No negotiations have been held with the US](https://longbridge.com/en/news/280191485.md) - [What are iShares Core S&P 500 ETFs?](https://longbridge.com/en/news/279499494.md) - [U.S. commercial paper market shrinks in week-Fed](https://longbridge.com/en/news/279827159.md) - [BlackRock’s Larry Fink warns against market timing, says missing best days can halve returns](https://longbridge.com/en/news/280177392.md) - [Is Rollins Stock Underperforming the S&P 500?](https://longbridge.com/en/news/279222696.md)