Bank of America expects the S&P 500 to have only about 2% upside over the next 12 months.

Bank of America strategist Savita Subramanian set a 12-month S&P 500 target of 7,800 points, implying only about 2% upside from current levels, and raised her year-end target to 7,400 points from 7,100, implying roughly 3% downside from current levels. The bank believes the risk of a near-term pullback in U.S. stocks is rising; the S&P 500 has seen only one 5% drawdown so far this year, versus a historical average of about three per year, while roughly half of the bear-market warning indicators it tracks have already been triggered. Bank of America noted that inflation, Federal Reserve policy, earnings quality and the credit environment remain the main risks, and that the inflation level currently implied by market valuations is significantly below the bank's forecast. Still, the bank maintained its long-term bullish view, arguing that companies replacing part of their workforce through automation and scaled processes will drive productivity gains. Bank of America expects S&P 500 constituent earnings to grow 33% in 2026 and 12% in 2027, and it favors large-cap value stocks, select small- and mid-cap stocks, and the equal-weighted S&P 500 index.