Royal Bank of Canada: The U.S. stock market faces a 20% fall risk under a high inflation scenario.

Deep tide TechFlow news, on June 16, according to Golden Ten data, Royal Bank of Canada strategists listed three potential scenarios for a pullback in U.S. stocks in a report, pointing out that the S&P 500 could fall by 20% if higher oil prices lead to a spike in inflation. U.S. equities are vulnerable given the recent rally and valuations looking too high, strategists said. They said that the wider and longer the conflict in the Middle East, the greater the negative impact on the U.S. stock market. The worst-case scenario, they argue, is that the S&P 500 will return to its April lows if the conflict pushes up energy prices. In a less severe scenario, the index could fall by around 13%. The analysis shows that if inflation "severely" spikes to 4%, earnings growth from 2024 is zero, the Fed cuts interest rates only twice, and the US 10-year Treasury yield remains at current levels, then by the end of the year, the benchmark stock index could fall to 4,800 points, almost 20% below current levels.