PNC's Agati Stays Bullish on US Stocks — But Treasury Yields and Midterms Are the Key Risks

The Quick Take

• PNC Chief Investment Officer Amanda Agati says strong corporate earnings and solid economic fundamentals continue to support the case for US equities.
• Elevated Treasury yields represent the primary valuation risk to the equity bull case, as higher discount rates compress multiples even when earnings grow.
• Midterm electoral uncertainty adds a policy risk premium to US equities in H2 2026, but Agati's base case remains constructive through year-end.

PNC Asset Management's Chief Investment Officer Amanda Agati communicated a constructive stance on US equities in a Bloomberg This Weekend appearance, grounding her view in the strength of Q2 2026 corporate earnings season and the resilience of US economic activity data. Agati's bullish positioning reflects the institutional consensus among large asset managers heading into Q3: earnings beats have been broad enough to justify current market valuations despite a rate environment that remains elevated relative to the 2010-2021 era. PNC manages over $170 billion in assets under management, making Agati's views a meaningful indicator of how large institutional allocators are positioned heading into Q3 rebalancing cycles.

The two-sided risk framework Agati identified — Treasury yields on one side, midterm uncertainty on the other — is the correct framing for the current equity market risk distribution. On the yield side, the 10-year Treasury has held above 4.3% for most of 2026, creating a higher-than-historical discount rate environment that compresses forward P/E multiples. The S&P 500 is trading at approximately 21x forward earnings, which is defensible if earnings growth sustains at 8-10% but becomes stretched if earnings surprise rates deteriorate or yields push toward 4.8%. On the midterm side, policy uncertainty around tax rates, trade tariffs, and regulatory posture creates a binary risk that institutional investors typically hedge by reducing gross exposure rather than taking directional bets.

The constructive institutional consensus on US equities provides a sentiment backdrop that limits downside unless a specific catalyst triggers reassessment. The scenarios most likely to break Agati's bullish framework are a material earnings miss in the financials or technology sector (which dominates S&P 500 earnings weight), a Treasury yield break above 5% that would represent a genuine multiple compression trigger, or an unexpected midterm outcome that materially changes the fiscal or regulatory trajectory. Investors should watch Q3 earnings guidance revisions, particularly from mega-cap technology and financial sector bellwethers, as the primary lead indicator for whether the consensus holds through year-end.