Morgan Stanley again adjusts its Fed forecast, now sees 4 cuts in 2026
Investing.com -- Oppenheimer analysts believe the recent market pullback resembles the volatility of 2022 when bearish sentiment dominated headlines but failed to materialize into a severe downturn.
“Recent bearishness exhibited in the market reminds us of 2022,” the firm noted, adding that the current sell-off reflects negative interpretations of economic data, earnings results, and policy uncertainty rather than a fundamental deterioration.
The S&P 500 has dropped as much as 10.1% from its highs, driven by concerns over domestic and geopolitical policies.
However, Oppenheimer sees resilience in the U.S. economy and corporate earnings, citing a strong labor market, Fed policy, and AI-driven innovation as key long-term supports.
The firm stated: "The fear and greed theme currently held by some bears, skeptics, and nervous investors… could prove overly negative in hindsight.”
While the market remains volatile, Oppenheimer sees opportunities for traders and investors.
“For investors, the current volatility presents opportunities to seek out ‘babies that get thrown out with the bathwater’ in market downdrafts.”
The firm believes that cooler heads will prevail, leading to a recovery similar to the October 2022 rally, which saw stocks rebound from bear-market territory to new highs.
With the S&P 500 still 7.8% below its February 19 peak, Oppenheimer remains positive on equities, favoring technology, communication services, consumer discretionary, financials, and industrials.
The firm also expects small and midcap stocks to gain momentum as the Fed eases monetary policy.
While acknowledging near-term uncertainty, Oppenheimer concludes: “We remain positive on equities.”
We continue to expect that small and midcap stocks could begin to experience more sustainable rallies now that the Fed has begun to cut its benchmark rate.”