This is really an earnings-driven market, says BNY Wealth's Alicia Levine

Market Outlook & Earnings - The market is primarily driven by earnings, with raised earnings expectations leading to increased S&P targets for the current and subsequent years [3] - Corporates are demonstrating the ability to generate earnings and margins despite concerns about macro data and the labor market [4] - Earnings momentum is a key factor, with strong earnings performance in previous quarters suggesting a bullish market even amidst policy concerns [7] - The market's focus remains on the fundamentals of the corporate sector, particularly earnings growth [5] Future Growth Projections - Earnings growth for 2025 is projected to be 115%, exceeding previous expectations [4] - Earnings growth for 2026 is projected to be 134% [5] - By the end of 2026, the earnings increase is expected to be significant, with a potential 10% gain next year [16] - S&P target by the end of the year is 6400, possibly 6700, and 7400 by the end of next year [16] Risk Factors & Considerations - A primary risk is the potential decline in margin growth and free cash flow due to tariffs, which could impact the market's higher multiple regime [15] - Tariffs could negatively impact retail sector earnings, although recent retail earnings have exceeded expectations [9] - Bond yields globally could potentially trigger a 5-10% sell-off, which is considered a normal market fluctuation [17]