Why this top Wall Street strategist isn't bullish on the S&P 500 for 2027

The S&P 500 ( ^GSPC ) could be a tough one to rally around in 2027.

"We're not particularly bullish on the index," Bank of America head of US equity and quantitative strategy Savita Subramanian said on Sozzi Unleashed . "I think the index itself is a bit risky because the other thing that I worry about is we've been in a 30-, 40-year period where we've seen S&P index inflows every year. We've never been in a market environment where the index has seen outflows. So I worry about that to some extent, because we're now at a point where investors are fairly saturated in equities across the board. You look at individuals, you look at asset owners and what's the most crowded equity ticker in the world … it's the S&P 500 index."

All things being considered, this year has been decent for investors — though at times it hasn't felt like it .

The year has been defined by whiplash as the US war on Iran sparked an aggressive oil price shock that pushed crude past $100 per barrel and reignited stubborn headline inflation.

To combat persistent price pressures — seen in today's October CPI reading , for example — Fed Chairman Kevin Warsh executed the first interest rate hike of the cycle in September, lifting the policy rate to 3.75% to 4%. Calls are now rising for the Fed to lift interest rates by 50 basis points at its final policy meeting in December.

Simultaneously, an unprecedented artificial intelligence boom drove tech valuations and hyperscaler capital expenditures into overdrive throughout the first half of the year. That exuberance turned into a sharp bust this fall, as slowing data center approvals, Election Day shifts, and soaring debt-financing costs triggered violent multiple compression and historic equity sell-offs across chipmakers and neoclouds.

The S&P 500 is up 9.5% year to date, outperforming the Dow Jones Industrial Average's ( ^DJI ) 8.5% advance and the 7.5% rise for the Nasdaq Composite ( ^IXIC ).

Subramanian warned, "So if you need to raise capital to meet your yield obligations or whatnot, I think that that's where things get a little bit interesting in terms of outflows. And that's where we see some risks to this thesis that the S&P 500 is just going to go up forever."

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