The stock market’s run to all-time highs after a dreadful spring sell-off has many on the Street feeling good about equities. Others take a darker view. Wells Fargo said Friday it sees the S & P 500 running as high as 6,600 in 2025. Citigroup earlier this month also raised its year-end target on the benchmark to 6,600, while Oppenheimer in late July bumped its forecast all the way to 7,100. To be fair, there are good reasons to be optimistic. As CNBC’s Michael Santoli pointed out in his Saturday column, the IPO market is showing signs of strength, credit spreads are tight and expectations for Federal Reserve rate cuts are sky high. But not everyone is optimistic. RBC’s Lori Calvasina, for example, thinks further gains may be harder to come by. .SPX YTD mountain SPX year to date “We continue to think the summer rally in the S & P 500 has generally made sense from a sentiment perspective, but is also starting to run out of room from that angle,” the bank’s head of U.S. equity strategy wrote Tuesday. Calvasina highlighted that the current rebound began more than 90 trading days ago. “Note that the rebounds of 2010, 2011, 2016, and 2022 all lost momentum around this point in time,” she said. “As of August 15th, the 2025 rebound has been most closely correlated with the rebound off the Dec-2018 low. Now is right around when that rebound took a breather, with a 7% drawdown between late April and early June of 2019.” Other issues are plaguing the market as well, including a high valuation and massive concentration in a few megacap tech names. “Mindful of this valuation pressure, along with the tendency of September and October to be tough months for S & P 500 performance in recent years, and the sudden deterioration in [American Association of Individual Investors] net bullishness, we remain on guard for choppy conditions in the balance of the year,” said Calvasina. Calvasina has a 6,250 target on the S & P 500, which implies downside of 3.1% from Monday’s close.
Why the rally on Wall Street could be running out of steam
