Citi: U.S. Corporate Earnings Expectations Turn Negative for the First Time, S&P 500 Could Drop 7%

Citi's index shows that analysts' expectations for U.S. corporate earnings have turned net pessimistic for the first time, with the number of analysts lowering their forecasts exceeding those raising them for the first time in 23 weeks. This marks the end of the longest period of earnings forecast upgrades since September 2021. Concerns are growing in the market about inflation and rising interest rates eroding corporate profits. Morgan Stanley strategist Michael Wilson warned that if stock valuations continue to decline and rising energy prices lead to tighter monetary policy, the S&P 500 could face a drop of up to 7%.

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