According to Evercore ISI, a Democratic sweep followed by a disputed midterm election and military escalation in Iran could send the S&P 500 down more than 10% to 6,800 by year-end. That scenario would erase the index’s nearly 11% gain this year, while an oil price spike, widening credit spreads and an economic slowdown could prolong the sell-off and make for a challenging start to 2027. In its baseline scenario, Evercore ISI kept its year-end target at 7,750 amid persistent macroeconomic pressures, including oil trading near $100 a barrel and an expected Federal Reserve rate increase. The bank nevertheless views election-related weakness as a buying opportunity and remains overweight artificial intelligence, information technology, communication services and consumer discretionary stocks. That strategy has one major exception: a prolonged rise in oil above $120 per barrel following escalation with Iran, or a spike to the record $147, could trigger an economic slowdown, wider credit spreads and a deeper market downturn.
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