Pullbacks are for buying

After a shaky start, stocks have ripped higher in 2026, with the S&P 500 closing out last week at a record high for the ninth time this year. But even as the market climbs to all-time highs, Wall Street’s message is the same it’s been all year: Buy the dip.

Here’s what the major banks are saying about this moment in markets:

• JPMorgan says this cycle is different, arguing that today’s geopolitical shock won’t play out like past drawdowns. Unlike 2022, inflation is cooling and central banks are less likely to tighten into an energy-driven slowdown, while earnings momentum for the S&P 500 is strengthening. That combination means recent weakness is more about sentiment than fundamentals, making dips a buying opportunity rather than a warning sign.
• Morgan Stanley also remains bullish, saying pullbacks should be shallow. For one, companies are doing better than Wall Street expected, with positive surprises running at about 2x the norm and forward estimates still moving higher. Meanwhile, AI adoption is accelerating: 25% of S&P 500 firms cited AI-derived benefits in Q1, up from 13% last year. They’ve helped cut costs and boost margins, especially for small caps.
• Goldman Sachs is more cautious near term, flagging technical pressures that could drive a pullback. Hedge funds have been “degrossing”—cutting both longs and shorts—signaling lower conviction, while pensions are poised to sell over $25 billion in equities, and systematic funds are no longer aggressively buying after a large run-up. Still, the bank frames any resulting weakness as positioning-driven rather than fundamental, and ultimately a buying opportunity.
• Evercore notes that the market’s recent surge—nearly 13% in just 12 sessions—is historically fast, rivaling some of the sharpest rebounds on record. While that pace suggests the market may be overbought in the near term, the firm’s base case still sees supportive macro conditions, including moderating oil prices. Evercore projects WTI oil will fall to the mid-$80s per barrel, helping the S&P 500 rise to 7,750 this year—but notes that if oil rises to $120 per barrel, it could push the index down to 6,315. Evercore says a drop below $76.73 per barrel, though, could fuel a rally toward 9,000.

The playbook

So, with all this in mind, how should investors play it?

JPMorgan says to position for a broader rally, with leadership expanding beyond mega-cap tech into value and small caps. The bank maintains an Overweight rating on semiconductors, even after the PHLX Semiconductor Index logged a record 18-day winning streak and sits roughly 50% above its 200-day moving average. JPM also sees international and emerging markets outperforming the US as the economic cycle progresses.

Bottom line: While some volatility is to be expected—especially with the Fed’s upcoming transition—the big banks are not exactly running for the exits. If anything, they’re sticking with the same playbook: Buy. The. Dip.—SY