Citi Says S&P 500 Needs AI and Non-AI Stocks to Reach 8,100 Darryn Pollock Mon, October 12, 2026 at 11:37 PM EDT 2 min read ^GSPC -0.06% Oura IPO oversubscribed Wall Street stock market trading floor. Photo by BeInCrypto Citi's Scott Chronert says the S&P 500 needs both AI stocks and rate-sensitive sectors to rally to reach 8,100. Only one of those groups is in good standing, by his account.
Chronert, Citi Research's head of U.S. equity strategy, says AI-linked companies make up just over half of the index. Third-quarter earnings season is getting underway.
Citi raised its year-end target to 8,100 from 7,700 in June, citing AI-driven earnings strength. On the AI side, Chronert expects earnings tailwinds to continue through third-quarter reports.
In contrast, Chronert said rate-sensitive sectors have dropped about 10% since the Federal Reserve's Jackson Hole symposium in late August.
Those include utilities, real estate, consumer discretionary stocks, and, to a degree, banks.
A rebound hinges on markets pricing out some expected Fed rate hikes, he said. The Fed raised rates by a quarter point on September 16. However, it could raise them again at the October 28 meeting.
Chronert also named the midterm elections as a hurdle the index must clear before year-end.
Meanwhile, Matt Stucky, senior portfolio manager at Northwestern Mutual, expects a positive season. He said consensus points to upper-20s year-over-year earnings growth, versus low 30s in the second quarter.
He said valuation multiples, the price paid per dollar of profit, could drive stocks from here. Fed policy, the 10-year Treasury yield, inflation, and oil all feed into that.
Aya Yoshioka of Wealth Enhancement Group said the outlook depends on what hyperscalers say about AI capital spending. Hyperscalers are the large cloud providers building out AI infrastructure.
Yoshioka wants to see last quarter's strong cloud growth and investment returns continue. Without that, a correction could follow as investors reset expectations for 2027.
"we need this broadening trade to come back to get to my 8100"
Scott Chronert, head of U.S. equity strategy at Citi
Concentration was a theme across the panel, which noted the AI trade now touches about 50% of S&P 500 companies. Chronert's 8,100 target depends on the other half joining in.
Read the Original story Citi Says S&P 500 Needs AI and Non-AI Stocks to Reach 8,100 by Darryn Pollock at beincrypto.com
