RBC Capital Markets isn’t giving up on the market after the slow start to the year. Lori Calvasina, the bank’s head of U.S. equity strategy, raised her year-end S & P 500 price target to 5,150 from 5,000. This is approximately 9.6% higher than the S & P 500’s Friday closing level of 4,697.24. Last week, the S & P 500 snapped a nine-week winning streak as investors began pulling back on the technology titans. The yield on the benchmark U.S. 10-year Treasury also traded above 4% last week, further placing downward pressure on the equity market. On Monday, it dipped back below the key level. .SPX YTD mountain SPX in early 2024 Calvasina’s revised forecast now makes her one of the most bullish investors on Wall Street, according to CNBC’s Strategist Survey . She now has the second-highest price target of strategists in the survey, falling only behind Oppenheimer’s John Stoltzfus’ 5,200 forecast. However, Calvasina added she’s still concerned that “the weakness we’ve seen in the S & P 500 so far in 2024 hasn’t fully played out.” “In December we became concerned about the possibility of a near-term pullback in the U.S. equity market given deterioration in our sentiment work, and we are now concerned that the weak start in January is just the beginning of a phase of turbulence,” Calvasina wrote. Calvasina’s bear case sees the S & P 500 closing at 4,770 in 2024, just 1.5% above Friday’s close. Her bull case has the index rallying above 5,400, implying 15% upside. The strategist added that her earnings outlook is positive enough to justify another year of gains for the stock market. On the other hand, she noted that higher bond yields might become a “dampener” of U.S. equity returns but wouldn’t necessarily become a “derailer.” Other risk factors include the 2024 U.S. presidential election, which could inject volatility into the market, and the economic downturn analysts are predicting this year. However, Calvasina believes that some of the headwinds from a potential slowdown could be offset by the market’s expectations for rate cuts, noting that stocks generally perform well in the six-month period before and after cuts begin. How to play it Going into this year, Calvasina is bullish on small-cap stocks, which currently look relatively cheap. However, the strategist worries that the asset class has become a much larger consensus call from investors in recent weeks. The Russell 2000 index rose 15% in 2023, lagging the large-cap S & P 500’s 24.2% advance. In early 2024, the small-cap benchmark has lost more than 2%.