Larry Adam

Oil is a sideshow; the fundamental driver of equities is the technology sector. Technology and communication services together are 50% of the S&P 500. The tech sector just entered a correction (down >10%), but in this bull market it has had six such corrections and still doubled the S&P 500's return. Investors should stay committed and not make decisions during non-earnings seasons; corrections have rewarded patience.

Base case expects Middle East de-escalation and a deal over the next month, pushing energy prices down to ~$75/barrel by year-end. Increased non-OPEC production (US, Canada, Venezuela, Norway) and SPR draws are helping to contain oil prices. Lower oil is good for consumers, reduces inflation pressure, and simplifies the Fed's job.

Year-end 2025 S&P 500 target is 7,650, implying further upside. However, near-term caution is warranted as the index approaches that target.