Financial analysts are issuing stark warnings about potential near-term volatility for the U.S. stock market, driven by escalating geopolitical tensions with Iran, while simultaneously framing any significant dip as a strategic buying opportunity for long-term investors.
Julian Emanuel, a senior strategist at Evercore ISI, forecasts that the benchmark S&P 500 index could fall to 6,150 in the coming week, which would officially push it into "correction" territory. This prediction hinges on an anticipated policy shift, with President Donald Trump expected to lift the pause on targeting Iranian energy infrastructure on April 6. Emanuel argues that while higher oil prices can inflict "lasting damage" on the economy, the market is approaching an "inflection point" that represents a chance for disciplined investors. He recommends using periods of "irrational" volatility to buy high-quality assets at a discount, particularly in large-cap tech, viewing a drop to 6,150 as a prime entry point.
Emanuel remains structurally bullish, maintaining a year-end S&P 500 target of 7,750—a 22% rally from recent levels. His confidence is rooted in the "very visible earnings streams" of AI-focused tech firms and a historical parallel to last year's "tariff tantrum," where market fears subsided and sparked a powerful rally.
In a separate but related analysis, Wells Fargo has cut its year-end S&P 500 target from 7,800 to 7,300, citing the Iran conflict as an unplanned risk. Analyst Ohsung Kwon noted that, for the first time according to the bank's model, stocks are pricing in more risk from the war itself than from oil prices. He described the current macro environment as a "lose-lose" ahead of key economic data, where strong data could keep Fed rates higher for longer, and weak data could fuel stagflation fears.
Despite the near-term pressure, Wells Fargo's internal PRSM model still points to a 14% return over the next 12 months, and the firm's earnings per share forecasts remain intact at $315 for 2026 and $365 for 2027. The bank notes that equity inflows have held steady since the war began—a departure from typical reactions to geopolitical shocks—suggesting investors are hedging rather than fully exiting, indicating a belief in a short-lived economic impact.
