Wells Fargo lowered its S&P 500 price target to 7,700 and told clients to brace for a 5%-10% pullback in the near term, according to a note covered by Yahoo Finance on the September 20 session. The call lands alongside a separate analysis showing the index trading at a valuation not seen in 26 years, a level some strategists argue has historically preceded sharp corrections.
The caution comes as Federal Reserve officials keep pushing back on the idea that inflation is beaten. Minneapolis Fed President Neel Kashkari said inflation remains too high and told Fox News the problem extends beyond oil prices, an argument that undercuts the case for aggressive rate cuts investors have been pricing in.
What is unresolved is timing. Wells Fargo's downside case is framed as near-term, not a change in its longer-run outlook, and the bank did not specify a date by which the pullback should materialize.