Key Highlights

  • RBC strategist Lori Calvasina sees a possible 5% to 10% pullback in the S&P 500 toward 7,000 to 7,400, a warning reported on October 26, 2026.
  • Deutsche Bank says the tech sell-off has room to run, while Apollo's Torsten Slok says AI has produced zero financial payoff outside the technology sector.
  • The S&P 500 closed at 7,676.77 on October 26, within 1.8% of its record, so SPDR S&P 500 ETF Trust (NYSEARCA:SPY), the largest ETF tracking it, is near its high.
  • The Federal Reserve starts a two-day meeting on October 27 with a decision on October 28, and about 70% odds of a December hike keep rates in view.

What the Strategists Are Saying

RBC's Lori Calvasina sees a potential pullback of 5% to 10% for the S&P 500, which would take the index toward 7,000 to 7,400 from its close of 7,676.77 on October 26, 2026. Measured against that close, a 5% decline is about 7,293 and a 10% decline about 6,909, simple arithmetic that shows the 7,000 to 7,400 range is a little narrower than the ratios imply. Deutsche Bank says the technology sell-off has room to run. Apollo's Torsten Slok says AI has produced zero financial payoff outside tech. These are opinions, not forecasts the firms are obliged to meet. Neither view is a consensus, and each firm's analysts may hold different targets.

Why the Warning Sits Beside a Bounce

The warnings arrived as the index rose 0.70% on October 26 after two straight weekly losses, helped by a chip rebound. Breadth was weak, with Nasdaq new lows of 349 above new highs of 82, and Communication Services fell 1.57% while Technology rose 1.69%. SPDR S&P 500 ETF Trust (NYSEARCA:SPY) holds all 500 companies, so a narrow rally led by a few sectors can lift it even when many stocks are falling. The 10-year Treasury yield near 4.99% is the macro overhang cited by investors, since a high yield on safe bonds lowers what stocks are worth in valuation models. Smaller companies often lag in such markets, which is why breadth is closely watched.

Risks and What to Watch

Strategist calls are often wrong on timing, and a pullback of 5% to 10% is a common event even in rising markets. The upside risk is that earnings from Alphabet (NASDAQ:GOOGL) and Microsoft on October 28 and Amazon on October 29 reassure investors about AI spending. The downside risks include a hawkish Fed, oil near USD 115 Brent and the November 3 midterms. The Fed decision on October 28 is the nearest catalyst, with markets pricing about 70% odds of a December hike. A rebound in the semiconductor index, up 2.82% on October 26, shows how quickly sentiment can swing. Investors should also keep in mind that strategist ranges are often revised after earnings, so the quoted levels are a starting point and not a fixed target, and holders of broad index funds already own the sectors being debated.

Where Things Stand

The answer is that RBC sees a pullback risk because breadth is thin and yields are high, not because SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has broken down. The index is within 1.8% of its record, so the warning is a caution rather than a signal. The next catalysts are the Fed on October 28 and big-tech results that week. These are opinions. This is not investment advice. Index levels used here come from published market data.