Wall Street strategists expect stocks to climb into year-end, citing strong AI-driven earnings and favorable historical trends in midterm election years even as bond yields hover near 24-year highs. Truist chief investment officer Keith Lerner said the path of least resistance into year-end is higher, noting that the Technology sector now trades at a price-to-earnings ratio of around 21, down from roughly 35 a year ago. Wall Street expects S&P 500 earnings to jump 30% year over year, with major banks set to kick off the quarterly reporting season. History supports a rally as midterms approach: the fourth quarter has been positive for the S&P 500 about 84% of the time during midterm election years, with an average gain of about 7%, though Lerner flagged 2018 as the outlier when the Fed was raising rates. Yardeni Research last month lowered its year-end S&P 500 price target to 7,900, citing rising bond yields, implying just over 1% upside from current levels, and Wall Street now expects the Fed to hold rates steady at its October meeting after a unanimous quarter-point hike in September. Dan Ives, Yorkville Ives partner and senior managing director, called the pullbacks buying opportunities rather than a time to be skittish, saying we are in the third inning of the AI revolution, while UBS chief investment officer of the Americas Ulrike Hoffmann-Burchardi recommended a diversified approach to tech favoring high-quality semiconductor and hardware beneficiaries of AI spending, megacap platforms, and defensive tech firms.
Samsung Electronics Co Ltd
NVIDIA Corporation
Truist Financial Corp
UBS Group AG