The summer on Wall Street wasn’t cruel after all. In fact, it was strong. The S & P 500 climbed 3% between Memorial Day and Labor Day, hitting a record closing high of 7,798.99 along the way. The equal-weighted version of the S & P 500 had an even better summer, rising 6%. Some on Wall Street think this strong run can carry on. But there are three big hurdles investors have to face first, to keep the good times going: Rising oil prices A potential Fed rate hike and higher bond yields Midterm elections Oil prices Crude prices have been rising of late, as tensions in the Middle East continue to escalate. On Tuesday, Brent traded near $100 per barrel, while West Texas Intermediate futures advanced roughly 2% to more than $93 after the U.S. and Iran exchanged strikes over the weekend. Higher oil prices have led to fears of rising inflation, which could lead the Federal Reserve to raise rates when policymakers meet next week. “With geopolitical tensions and oil prices on the rise, the markets may find it difficult to focus on much beyond the inflation discussion,” said Chris Larkin, managing director of trading and investing at E-Trade. @CL.1 YTD mountain WTI in 2026 Crude’s rise weighed on equities Tuesday, with the Dow Industrials and S & P 500 both opening lower. Fed rate hike coming? With oil prices on the rise, investors have braced for potentially tighter monetary policy out of the Fed. The CME Group’s FedWatch tool shows traders are pricing in a 58% chance of a quarter-point rate increase when the central bank wraps up its next meeting on Wednesday Sept. 16. Those odds are also being reflected in Treasurys. The benchmark 10-year Treasury note yield is up nearly 14 basis points since Aug. 4. “The question is whether that reflects better-than-expected economic growth, higher-than-expected inflation, and/or looming fiscal debt crises,” wrote Ed Yardeni, president of Yardeni Research. Midterms Lastly, the U.S. midterm elections will gain more attention as November approaches, with Democrats expected to regain control of at least one legislative chamber. “Midterms are in & of themselves unlikely to drive sustained market rotation, but we see negative seasonality into the election. We could see a potential initial market reaction if Democrats outperform expectations and investors question the durability of the existing policy regime,” Morgan Stanley strategist Ariana Salvatore wrote to clients last week. Momentum still strong Yet many on Wall Street remain bullish toward stocks heading into year-end. Yardeni said this is still “a worldwide bull market” for stocks, calling for the S & P 500 to reach 8,400 by the end of 2026, which would equal about a 9% move higher. The median S & P 500 target among strategists included in the CNBC Market Strategist Survey sits at 8,000. The benchmark entered Tuesday’s session at 7,718.6. “For active managers, all that has mattered is whether we are in a momentum market or anti-momentum market. We suspect post-Labor Day, momentum will win the day again, based on technicals and seasonal outperformance of YTD winners (momentum still outperforming on the year),” wrote Tavis McCourt, strategist at Raymond James. Goldman Sachs’ Tony Pasquariello also noted that volatility remains low. Indeed, the Cboe Volatility Index (VIX) traded around 15 on Tuesday. Last week, it hit its lowest point since December. And while seasonality is “tricky” this time of the year, “once we move past the midterms … the path of least resistance favors a rally through year-end,” Pasquariello wrote.