Kwon cut his year-end S&P 500 target, writing, "Other than a firm resolution [to the war], we don't see many upside catalysts and see it skewed more negatively for equities." He identifies inflation as the biggest risk, which the war has exacerbated. The oil shock increases inflationary pressure. This threatens corporate margins, consumer spending power, and could limit or reverse expected monetary easing, creating a headwind for equity valuations and earnings. The conflict has introduced a significant macro risk (inflation) that outweighs potential positive catalysts in the near term, justifying a more cautious stance on the broad equity index. The Federal Reserve tolerates higher inflation (e.g., ~3%) and does not tighten policy, allowing growth and earnings to offset price pressures.