S&P 500 may pull back before midterms, but Citi says buy the dip

Citi reiterated an overweight stance on equities and said it would use any weakness before the U.S. midterm elections to add exposure, arguing that a major top in stocks looks unlikely. The bank pointed to still-positive news flow, rising U.S. and global earnings revisions, and improved liquidity conditions after U.S. Treasury actions helped stabilize the long end of the curve. Citi also said recent caution appears tied more to "AI indigestion" than to higher rates, and it sees sector rotation limiting downside even if semiconductors are only in a bear-market rally. Overall, the note frames any near-term pullback in the S&P 500 as a buying opportunity rather than a reason to turn defensive.