Citigroup strategist Scott Chronert stated in an interview that despite ongoing tensions in the Middle East, the S&P 500 is expected to climb to 7700 by the end of 2026, supported by strong corporate fundamentals.
This forecast comes as the conflict involving Iran enters its second month. Chronert acknowledged that short-term positioning has intensified recent market volatility, as investors react to news suggesting potential de-escalation.
He emphasized that corporate earnings continue to outperform expectations. Current consensus estimates have surpassed what were considered aggressive outlooks at the beginning of the year.
Chronert noted that April could present heightened risks. Rising energy prices may begin to affect other goods and services, and during the upcoming earnings season, corporate executives might express caution even if their financial results are solid.
He also suggested that analysts may need to adjust their target stock prices in light of recent market pullbacks, describing April as a "period of peak risk." Looking beyond the near-term turbulence, Chronert anticipates that if geopolitical pressures ease and oil prices and yields decline, the stock market will resume its upward trajectory.
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