Wall Street is starting to turn cautious on stocks heading into the final months of the year, with a key investor survey and a new S&P 500 price target suggesting stocks are in for a rough autumn patch due to surging bond yields and soaring energy prices.

The new set of outlooks, while not signaling an outright bearish take on stocks as they head toward the four-year anniversary of the current bull market in mid-October, nonetheless highlight a host of issues that have already have stalled performance over the past three months-and raise noticeable red flags for the near-term.

Wells Fargo lowered its end-of-year forecast for the S&P 500 by 250 points on Tuesday, taking it to 7700 points, a level that would suggest only modest gains from Monday's 7619 close.

However, the bank's chief equity strategist, Ohsung Kwon, cautioned that "we see 5% to 10% downside risk first," adding that markets are entering the "late innings" of a record earnings cycle.

Similarly, Lori Calvasina, head of U.S. equity strategy at RBC, argued earlier this week that "risks of a garden-variety pullback of 5% to 10% have grown" ahead of the midterm elections.

The Wells Fargo team lowered its recommended exposure to the tech sector, the market's star performer over the first half of the year, to equal weight, while boosting its health care exposure to overweight.

Health care stocks have been one of the market's top performers over the past three months, with the sector rising around 9%, trailing only the 12.1% advance for the S&P 500 energy sector. Information technology, the largest of the three sectors focused on the AI trade, has fallen around 0.3% over the same timeframe.

That underperformance has led to a stalling of broader stock gains over the summer months, with the S&P 500 now just 100 points north of the 7500 point mark, which it first breached on May 14.

Earnings, however, have been extraordinary, with collective S&P 500 profits for the second quarter rising 35% as compared to the second quarter of 2025. LSEG forecasts suggested the third-quarter tally will be $768.8 billion, a 30% increase from the same period last year.

Full-year earnings growth estimates are holding near 35%, the highest since 2021, but analysts expect a sharp decline in 2027, with a full-year growth tally of just 15.3%.

Earlier this week, Bank of America tweaked its 2026 price target for the S&P 500 modestly higher, but still sees the benchmark finishing lower on the year, at around 7400 points.

Ben Snider, chief U.S. equity strategist at Goldman Sachs, is holding onto his 8000 year-end price target for the S&P 500, which would be a 5% gain from current levels. But he expects that only 300 more points will be added over the next nine months that follow.

According to Bank of America's closely tracked survey of global fund managers, these large investors' cash holdings increased toward a more neutral positioning level in September, indicating that they are now less bullish on stocks. Just over a third of those polled said the market's biggest tail risk is a "disorderly" rise in global bond yields, which means it replaces "AI bubble" as most investors' biggest concern.

Bond markets continued their worrying selloff on Tuesday, with 10-year Treasury yield hitting 5.03%, the highest since 2007, and the 30-year yield testing 5.4%.

According to the Bank of America survey, fund managers are still betting on the broader AI trade, and maintain their conviction that capex would continue to rise. At the same time, they say the most crowded trade heading into autumn is "long global semiconductors."

The PHLX semiconductor index, which surged more than 106% from the end of last year to its record high in late June, has slumped nearly 25% since then, and suffered its single biggest decline in two months on Monday.

An index of the so-called Magnificent Seven tech giants is holding up better, but is still down around 1% from its late May peak.

Wei Li, global chief strategist at the BlackRock Investment Institute, is still bullish on the AI trade, arguing it can support both broader economic growth and corporate profit expansion even as it gobbles up power, capital, and other scarce resources.

"Higher rates and strong equities need not be contradictory," Li said in a note published Monday. "What drives yields matters. When higher yields reflect stronger investment and growth, the resulting earnings strength can help offset a higher cost of capital."

This dynamic "explains why we maintain our U.S. equity and AI overweights," she added.

Perhaps the most immediate pressure for stocks-one which is tied to domestic growth prospects, consumer spending trends, and Federal Reserve policy-is the ongoing surge in global crude prices.

Brent futures contracts, the global pricing benchmark, have risen nearly 45% since the end of June as the U.S. war with Iran enters its sixth month, disrupting energy traffic, refining capacity, and broader global demand.

The moves have also stoked domestic energy prices, with gasoline prices rising nearly 11% from the end of June to $4.33 a gallon. Diesel fuel, the lifeblood of the U.S. economy, has surged 70% over the past year to a record high of $6.27 per gallon.

That's lifted inflation forecasts, and powered bets on a September Fed rate hike, which now sit at 90% ahead of tomorrow's closely watched decision in Washington. Further increases over the coming months are expected as well.

Seema Shah, chief global strategist at Principal Asset Management, says the rate hike debate has shifted from "if" to "how much," which changes the investment strategy into the end of the year.

"For investors, risk assets can comfortably absorb two or three hikes provided economic growth and earnings remain strong," she says. "However, if inflation proves more persistent and the Fed is forced into an extended tightening cycle, the outlook will become significantly more challenging."

Wall Street is leaning in that direction. It's just not ready to say so just yet.