RBC cuts S&P 500 target, saying the “vibes have been weakening”

Slower growth, stickier inflation, no improvement in corporate profitability, and bad vibes.

That’s a recipe for four straight weeks of losses by the SPDR S&P 500 ETF, and enough for RBC Capital Markets to see a lower ceiling for the US stock market.

Strategists at the bank lowered their full-year target price for the S&P 500 to 6,200 from 6,600. That effectively cuts the calendar year gains they envisaged at the start of the year in half, though it still implies ~10% upside from current levels.

Investor, consumer, corporate, and political vibes are all weakening, though sentiment hasn’t gotten so depressed that it’s time to bet against the crowd and buy, chief US equity strategist Lori Calvasina noted.

“The US equity market is at a fork in the road, and we think the path it goes down for the rest of this year may be determined by whether there is any change in the policy narrative, how hard data comes in, and the results and commentary from companies in 1Q reporting season, which gets underway in mid April,” she wrote.

Calvasina trimmed her earnings forecast for the benchmark US stock index by 2.5%, less than the reduction in its target price. These revisions are informed by fresh forecasts from her colleagues on the economics and rates team.

The good news — if you can call it that — is that at 5,500, Calvasina’s bear case for the S&P 500 at year-end is a level we’ve already been lower than in 2025.