Evercore Sees S&P 500 Downside Risk Into Year-End
Evercore ISI's midterm analysis lays out year-end S&P 500 scenarios ranging from 6,800 to 8,400.
Updated on Nov. 3, 2026 in Economic Indicators
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Evercore ISI published an 11-page midterm election analysis on Sunday, November 1, 2026, outlining possible S&P 500 outcomes by year-end. Its worst-case scenario puts the index at 6,800, more than 10% below current levels, if President Trump escalates military action in Iran before the new Congress is seated in January.
Why it matters
The S&P 500 has gained almost 11% so far this year, and the scenarios show how election results, Iran policy and oil prices could shape the market's direction. Evercore warned that an oil price spike, widening credit spreads and an economic slowdown could fuel a prolonged sell-off.
Evercore ISI's scenarios place the S&P 500 between 6,800 and 8,400 by year-end, against a year-to-date gain of almost 11%. West Texas Intermediate crude trades near $100 a barrel, below the $120 per barrel level Evercore linked to a prolonged downturn, and the scenarios remain contingent on election results and Iran policy.
The players
Evercore ISI
Evercore ISI is the research arm of the independent investment bank Evercore, known for its equity strategy and market forecasts.
President Donald Trump
Donald Trump is the current President of the United States, whose Iran policy is a central variable in Evercore's scenarios.
Federal Reserve
The Federal Reserve is the central bank of the United States, responsible for setting monetary policy including benchmark interest rates.
The details
Evercore's worst-case scenario assumes President Trump escalates military action in Iran before January, while its most bullish case assumes Republicans keep both chambers, the vote is undisputed, and Iran negotiates with the U.S. A Democratic sweep of both chambers with a disputed election and no military escalation yields a year-end level of 7,650.
Timeline
Sunday, November 1, 2026: Evercore ISI publishes its midterm election analysis.
December 9, 2026: The Federal Reserve is expected to raise interest rates.
January 2027: The new Congress is seated, a key date in the worst-case scenario.
2027: Hyperscalers must raise capital to finance $1.3 trillion in capital expenditures.
Market Landscape
Hyperscalers must finance $1.3 trillion in 2027 capital expenditures, a spending pace that intersects with the CNBC All-America Economic Survey finding that 80% of Democrats oppose AI data centers near their homes. Evercore's scenarios suggest that political and financing pressures on the AI buildout could shape market returns alongside Federal Reserve policy.
Retirement and brokerage portfolios tied to the S&P 500 could swing meaningfully across the 6,800 to 8,400 range Evercore outlines. Households with mortgages or variable-rate debt may also feel the effect of the expected Federal Reserve rate increase on Dec. 9.
The takeaway
Evercore's range shows that year-end market outcomes hinge on a small set of identifiable variables: election control, Iran policy and oil prices. Tracking those three factors offers a clearer read on the scenarios than headline index levels alone.
What happens next
The Federal Reserve is expected to raise interest rates on Dec. 9, and the new Congress is seated in January 2027, both of which fall within the window of Evercore's scenarios.
Further reading
For broader context on the indicators shaping these market scenarios, explore Economic Indicators.
Source note: This article includes information reported by CNBC.
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