BofA's Savita Subramanian predicts S&P 500 will reach 7,100 by 2026, marking the most pessimistic outlook on Wall Street to date.

Bearish Outlook for 2026: Bank of America Securities' Savita Subramanian predicts the S&P 500 will end 2026 at 7,100, reflecting only a 4% increase from current levels, citing significant multiple compression due to a lack of economically sensitive companies in the index.

Contrasting Views Among Strategists: Subramanian's bearish stance contrasts with more optimistic forecasts from other strategists, such as Oppenheimer's John Stoltzfus, who anticipates an S&P 500 rally to 8,100, and Deutsche Bank's Binky Chadha, who sees it reaching 8,000.

Concerns Over AI Impact: Subramanian warns that the rise of AI could lead to job losses, affecting consumer spending and altering market dynamics, as the current market is heavily reliant on AI-driven stocks.

Investment Recommendations: In light of her predictions, Subramanian advises investors to overweight consumer staples and underweight consumer discretionary stocks, reflecting her cautious outlook on the market.