Wall Street investment banks ignore gunfire and inflation, remain bullish on the rise of US stocks this year.

In the first two months of this year, the S&P 500 Index showed no signs of improvement. However, considering the impact the market has faced, from political turmoil in GEO Group Inc to the disruptive threat posed by artificial intelligence, the US stock market can be considered resilient. However, this is far from the expectations of Wall Street bulls for the benchmark index by the end of 2026. Despite the many potential adverse factors, the average target price for the S&P 500 Index at the end of December is still expected to increase by 10% from the current level, in line with the expectations at the beginning of the year. According to Bank of America Corp's sell-side sentiment indicator, strategists also maintain their asset allocation weights unchanged. Their optimism stems from expectations of above-average economic growth in the US and corporate profit growth. Furthermore, although it is still early to draw conclusions, institutional tracking of all strategists has not become cautious since the US started the war in the Middle East. This war has currently pushed up energy prices. Sameer Samana, head of global stocks and physical assets at Wells Fargo & Company's investment research institute, said, "The key lies in the fundamentals of macroeconomic and corporate profit, and so far, political turmoil in GEO Group Inc does not seem to have affected them. The conflict with Iran is different from other conflicts, if oil prices remain high for several months or quarters, it may threaten global economy and corporate profits." The US-Iran war is just the latest blow to investor confidence this year: ongoing inflation and constantly changing tariff policies make it difficult for companies to make plans, the potential for artificial intelligence applications to disrupt multiple industries, private lending companies struggling under the pressure of bad loans, and Trump's ambitious foreign policy also unsettle both US allies and adversaries. On Monday, analysts advised clients that any market pullbacks related to Iran would be a good buying opportunity on dips. Companies from Morgan Stanley to Piper Sandler & Co. reiterated their bullish views on the stock market and cited past examples of political unrest in GEO Group Inc, pointing out that such unrest typically lasts a short duration. On Monday, the S&P 500 Index closed basically flat, erasing an early 1.2% decline. Some believe that this optimism is misplaced. Matt Maley, chief market strategist at Miller Tabak + Co LLC, said, "This complacency has reached incredible levels. We have reached a point where investors will buy on dips until this strategy fails. The problem is, when the inevitable correction arrives, many investors will suffer heavy losses." According to Savita Subramanian, head of stock and quantitative strategy at Bank of America Corp, while there have been changes within the market, "the once-booming growth areas have sharply downgraded", but stock market sentiment this year "has remained resiliently optimistic." Despite various short-term concerns, strategists' bullish views are still based on the premise that the profit engine of US companies is sufficient to continue driving stock market up. However, in the recent earnings season, strong financial data - S&P 500 Index component companies' profits growing by 13%, nearly 6 percentage points higher than expected - were not enough to boost confidence in stock investors. From JPMorgan Chase & Co. being the first to release earnings to Walmart Inc. reporting results, the S&P 500 Index dropped by 1.7%. There is another dangerous signal in the market. Alternative investment management company Blue Owl Capital (OWL.US) recently halted redemptions on one of its funds and began selling loans to raise funds. The company warned that increasing borrower pressure, rising interest costs, and the leverage effects left over from the low-interest-rate era are beginning to put pressure on parts of the private credit market. For stocks, this means that credit tightening and potential defaults could impact corporate profits, especially in industries with high leverage. Maley said, "Everyone believes that whether it's the Fed's policy adjustments or Trump's policy adjustments, they can prevent even the slightest decline, this is a big mistake. Sooner or later, any of these problems will cause profit expectations to start declining, which will cause serious panic among investors."