It was just in January when the stock market had tax reform, repatriation, earnings growth and a trend for rekindled animal spirits all driving equities higher and higher. In fact, many forecasters were starting to panic that their baseline assumptions for the market were set way too low and that the markets would set new record after new record. Then came the selling pressure and the volatility swings, and the rest is history.

Now there is a serious question that some investors should be thinking about. What if the 2018 peak of the S&P 500 and Dow Jones industrial average already has been seen?

According to RBC Capital Markets, that is exactly what investors should be thinking about. Despite the big sell-off and volatility, most Wall Street analysts and index forecasters have not exactly been quick to lower their annual year-end or peak-2018 index targets. RBC just lowered its S&P 500 price target for 2018 to 2,890 from 3,000, and it lowered the S&P 500 earnings per share equivalent to $151 per share from $155.

And if you go back to the 2018 peak level, the S&P hit 2,872.87 — compared with 2,639 on Tuesday. It is possible to argue that RBC’s lower target of 2,890 is still above the current 52-week and all-time high, but the reality is that it’s less than 1% higher. Who on earth ever targets or even cares about that last 1% move after the indexes have risen and risen?

There also has been a rotation in sector weightings, and it may spell even more trouble than the mere S&P target cut might sound. While the move sounds bad, RBC’s note signals that it remains constructive in equities and that its enthusiasm is just a notch lower than it was at the start of 2018. The firm also is targeting lower returns in 2018 than were seen in 2017.

While the index target cut for the S&P may be a bit deflating, the real impact here is that RBC thinks the best has been seen for technology. RBC lowered the sector to Underweight from Market Weight, citing a breakdown in ETF money flows, a crowded sentiment and allocation in hedge funds and mutual funds, higher valuations, and even policy risks. Another issue is that investors have started to move toward value over growth, since the gains have already been so massive. RBC sees IT services and software related companies as particularly overvalued.

RBC’s view on utilities went up to Market Weight from Underweight, indicating a flight back to safety and predictable earnings may be best. The firm sees utilities as a top choice to play defensively while gaining exposure to value.

One other issue to consider is that stock buybacks had picked up handily in the first quarter, and there is confidence that the buybacks activity may offer some support for equities in the coming months. That said, it is worth pointing out that the largest stock buybacks tend to be coming from technology giants.

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