Why a 'nasty' 10% to 15% sell-off in the stock market may be a few months away

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the market," Sosnoff told me on Yahoo Finance's Opening Bid.Sosnoff added, "I think there's a lot of stocks that are very fairly priced, and I know there's not a lot of other things to invest in and things like that. But I will just say that I think stocks are fully priced. And I think if you do get any kind of momentum to the downside, like we saw last April — and I expect to see something like that maybe in March or April or May this year — I think you're going to get a little nasty sell off, maybe 10% to 15%."To Sosnoff's point, there isn't much margin for error being priced into markets.Wall Street is expecting a big year for corporate earnings based on the view that mostly everything — from the economy to AI productivity to geopolitics — goes great. This optimism has powered the S&P 500 (^GSPC) beyond 7,000 for the first time, with the Dow Jones Industrial Average (^DJI) knocking on the door of 50,000.This embedded content is not available in your region.S&P 500 earnings are estimated to increase by double-digit percentages in each quarter of 2026, according to FactSet data. Earnings growth is expected to be the strongest in the fourth quarter at 18.1%. For the year, earnings are being modeled to grow 15%.Meanwhile, the bottom-up strategist's price target on the S&P 500 is a lofty 8,010 — up about 18% from current levels.In turn, the forward price-to-earnings ratio (PE) for the S&P 500 is 22 times — well above the 10-year average of 18.7 times. Stocks are almost as richly valued as when they hit a peak in early January 2022. What followed was the start of a nine-month bear market — the benchmark index plunged about 19%.The backdrop for stocks, however, is anything but perfect.Fed Chair Jerome Powell revealed Sunday night that the Justice Department served the central bank with grand jury subpoenas, threatening a criminal indictment related to his testimony before the US Senate. At issue: reportedly, the central bank's renovation of its Washington, D.C., headquarters and whether Powell misled Congress about the project's depth.In a video statement, Powell described the investigation as "unprecedented" and questioned the motivation for the move. The administration has been vocal in its desire for lower interest rates. Powell affirmed that he carried out his duties as Fed chair "without political fear or favor."Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,974.25 +8.00 (+0.11%)Dow Futures49,348.00 -8.00 (-0.02%)Nasdaq Futures25,701.75 +70.75 (+0.28%)Russell 2000 Futures2,668.60 +2.50 (+0.09%)VIX16.75 +0.77 (+4.82%)Gold4,608.30 -27.40 (-0.59%)Trending tickersBTC-USD Bitcoin USD 96,241.73 +1,658.68 (+1.75%)TSM Taiwan Semiconductor Manufacturing Company Limited 327.11 -4.10 (-1.24%)ROLR High Roller Technologies, Inc. 18.89 +15.37 (+436.65%)RIVN Rivian Automotive, Inc. 17.50 -1.35 (-7.16%)MDB MongoDB, Inc. 386.89 -24.30 (-5.91%)PortfolioSign in to access your portfolioSign inTop gainersCRML Critical Metals Corp. 17.93 +4.41 (+32.58%)BTDR Bitdeer Technologies Group 14.76 +1.99 (+15.58%)EWTX Edgewise Therapeutics, Inc. 28.17 +3.22 (+12.91%)LUNR Intuitive Machines, Inc. 19.76 +2.19 (+12.46%)VKTX Viking Therapeutics, Inc. 34.34 +3.65 (+11.89%)Top losersTCOM Trip.com Group Limited 62.78 -12.90 (-17.05%)DAVE Dave Inc. 185.46 -26.26 (-12.40%)VIA Via Transportation, Inc. 24.05 -2.82 (-10.49%)PSO Pearson plc 12.99 -1.40 (-9.73%)NAVN Navan, Inc. 15.66 -1.59 (-9.22%)Most activeNVDA NVIDIA Corporation 183.14 -2.67 (-1.44%)INTC Intel Corporation 48.72 +1.43 (+3.02%)BBAI BigBear.ai Holdings, Inc. 6.26 +0.17 (+2.79%)ONDS Ondas Holdings Inc. 13.56 -0.33 (-2.38%)PLUG Plug Power Inc. 2.3500 +0.0700 (+3.07%)Top economic eventsEarnings eventsMy earnings eventsEarnings events