"Bullishness is relatively high while the Fed remains shy of its inflation target," Oppenheimer & Co.'s chief investment strategist John Stoltzfus wrote in a note to clients. He said investors should curb their enthusiasm for a long rate pause or even a rate cut and instead "right-size expectations."
Lingering concerns that a strong economy will prompt the U.S. Federal Reserve to hold interest rates higher for longer has been weighing on stocks, with the U.S. benchmark sliding 3% since a peak in late July. A buzz around artificial intelligence has been boosting the S&P 500 Index for most of this year, ignoring risks from rates and a potential economic slowdown.
"We could see some choppiness near term," said Stoltzfus, who lifted his target on the S&P 500 to 4,900 points in late July, the most bullish call among strategists surveyed by Bloomberg. Since then, the US benchmark has been under pressure.
