Dow Jones, S&P 500 and Nasdaq-100 futures fell on Wednesday after Brent crude topped $100 a barrel for the first time since July, extending a broad Tuesday selloff across major indexes. Wall Street strategists at RBC, HSBC and Barclays are still lifting their S&P 500 price targets, even as they warn that pullback risk is mounting.
Dow Jones futures fell 0.65% ahead of Wednesday's open, with S&P 500 futures down 0.4% and Nasdaq-100 futures off 0.5%, after Brent crude jumped nearly 3% to top $100 a barrel for the first time since July.
Oil spike follows tanker strikes
The U.S. military destroyed five Iranian oil tankers on Tuesday, in retaliation for the Revolutionary Guard firing ballistic missiles at an American warship twice over the prior two days, according to U.S. Central Command. Chinese crude purchases reportedly have also picked up after months of minimal buying that had kept prices low.
Treasury yields moved too: the 10-year yield rose two basis points to 4.805%, its highest settlement in nearly three years.
Tuesday's broad losses, but AI hardware bucks the trend
The Dow Jones Industrial Average fell 1.2% on Tuesday, sliding below its 50-day moving average, while the S&P 500 declined 0.6% and the Nasdaq composite gave up 0.3%.
AI hardware bucked the trend, though, as AMD stock jumped 5.9%, Taiwan Semiconductor climbed 2.35% and HPE leaped 7.8%. AMD Chief Financial Officer Jean Hu said the company's total addressable market could reach $3 trillion by 2030, up from $2 trillion back in July.
Strategists split on how far the rally can run
Several banks are raising their S&P 500 outlooks even so. RBC Capital Markets kept its 12-month target at 8,150 on Tuesday but said the risk of a 5% to 10% pullback has increased, citing a historically weak September, midterm-year volatility and the unresolved war in Iran.
HSBC lifted its target from 7,650 to 8,100 and now expects the index to reach that level by the end of 2026 rather than next year, pointing to first-half earnings-per-share growth running close to 40%.
Barclays raised its year-end forecast to 7,950 from 7,800 while holding its December 2027 target at 8,800, though it remains cautious on valuations given resilient inflation and a more hawkish interest rate outlook. According to Barclays: "earnings should drive the majority of the upside in our targets, rather than multiple expansion".
Sources: Investor's Business Daily, MarketWatch
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