S&P 500 targets are being slashed

New York: Expectations for the S&P 500 index are buckling under the clamour of inflation and economic growth worries stoked by crude oil's rally.

The US equity gauge may drop to 4,000 by the end of 2022 - a fall of some 8% from current levels - according to Yardeni Research, which last month had a target of 4,800. Evercore ISI cut its outlook to 4,800 from 5,100. "We see a more stagflationary outlook with persistently higher inflation and less economic growth," Yardeni's chief investment strategist Ed Yardeni wrote in a note, adding a recession can't be ruled out given the jump in oil.

The conflict and the price shock could chill investment and consumer spending just as the Federal Reserve prepares to embark on a series of interest-rate hikes to damp inflation, which was already high on pandemic-era effects.

A test of 3,670 on the S&P 500 isn't a base case but can't be ruled out, Julian Emanuel, chief equity strategist at Evercore ISI, wrote in a note.

He's previously mentioned that level, a drop of about 15% from Friday's close, as one that might trigger the "Fed put," referring to the idea that the Fed could take steps to help stabilize markets.