Wells Fargo Cuts S&P 500 Year-End Target to 7,700 and Warns of 5-10% Near-Term Downside

Wells Fargo has lowered its year-end 2026 S&P 500 price target to 7,700, stepping back from the 7,950 level it set in June after raising the forecast on AI-driven earnings optimism and a calming macro backdrop. The bank is warning investors to brace for a 5-10% pullback before the index finds its footing, making Wells Fargo what may be the first major Wall Street firm to cut its S&P 500 year-end target since the early period of the U.S.-Iran war.

The move reverses a series of upgrades Wells Fargo made through 2026, including a June lift to 7,950 from 7,300 that was grounded in stronger corporate earnings and renewed AI investment confidence. The new 7,700 target implies only modest gains from recent levels once the anticipated drawdown runs its course. MarketWatch noted the cut stands out precisely because Wall Street has been in near-continuous target-raising mode, and whether other major firms follow Wells Fargo lower is now a key question for equity strategists.