RBC Capital Markets is downplaying last week's stock market volatility, suggesting the recent pullback is likely short-lived. The firm's analysis indicates the S&P 500's 2.6% decline from its all-time high represents a typical market correction rather than the start of a deeper downturn. According to RBC's Head of U.S. Equity Strategy Lori Calvasina, similar dips have occurred multiple times over the past several months.

Calvasina notes that even if markets weaken again, it would likely be a "tier 1 garden-variety pullback" in the 5-10% range. She emphasizes it's "premature to assume" a systemic risk backdrop similar to past growth scares. Risk indicators that had raised concerns earlier in 2026, including bitcoin and private-market proxies, began stabilizing late last week.

The firm maintains an optimistic outlook, reiterating its 7,750 target for the S&P 500 over the next 12 months. RBC's models continue to argue for solid gains in the stock market, supported by expectations for modest Fed cuts, stable long-term yields, and 13% S&P 500 EPS growth in 2026. With bottom-up 2026 EPS estimates rising back to $314, the firm states this statistic feeds directly into their valuation model for their price target and contributes to their ongoing optimism on stocks.

Quick Fact: RBC Capital maintains a 7,750 target for the S&P 500 over the next 12 months.