Citi: US corporate earnings outlook turns negative for first time in 23 weeks, S&P 500 faces potential 7% drop

For the first time in 23 weeks, analysts have turned net pessimistic on US corporate earnings as concerns over inflation and rising interest rates mount. Citi's index shows that downward revisions now outpace upward ones, ending a cycle of positive revisions that began in September 2021. Morgan Stanley strategist Michael Wilson warned that the S&P 500 could decline by up to 7% if valuations continue to slide while energy prices drive further monetary tightening.