Bank of America Corp.'s Savita Subramanian, among top equity bears, raised her Street-low target for the S&P 500 Index to 7,400 from 7,100, citing seasonal weakness and overdue pullback risks. The new level implies a 3.4% drop from Friday's close and remains one of the most bearish forecasts on Wall Street per a Bloomberg survey of over 20 strategists. She expects the index to reach 7,800 in the next 12 months, a mere 2% gain from last close.

Subramanian warned of interest-rate risks, noting only one 5% pullback occurred in 2026 versus the typical three per year, with half her bear-market indicators already triggered. US stocks declined Monday as AI leaders urged slower development, clashing with the Trump administration and Wall Street, while Treasury 10-year yields briefly exceeded 5% for the first time since 2023 due to oil, inflation, and borrowing cost concerns. She remains cautious on inflation and Fed hikes, stating any catalyst raising financing costs could 'hasten pain,' referencing how credit cycles 'start slow but end fast and painful.' Subramanian maintains a long-term bull case via productivity, forecasting 33% EPS growth in 2026 and 12% in 2027, driven by AI capex, manufacturing, and productivity outpacing macro forecasts.

She downplayed midterm election risks to AI spending, noting buildout is driven by red-state governments. Her update follows similar hikes from JPMorgan's Dubravko Lakos-Bujas (8,000) and Ed Yardeni (8,400).