Investing.com -- RBC Capital Markets has grown more cautious on the near-term outlook for U.S. stocks, warning in a note on Wednesday that the S&P 500 could see a pullback of as much as 10% even as it stands by a bullish 12-month view.

Head of U.S. equity strategy Lori Calvasina said "risks of a tier 1 / garden variety pullback of 5-10% have grown" as the fall gets underway, pointing to several factors.

The first is said to be seasonality, with September having been a down month for the S&P 500 in five of the past 10 years.

The second is the U.S. midterm elections, which have historically brought volatility in the back half of such years. RBC also noted that AI backlash has emerged as a campaign issue and that betting markets increasingly point to a Democratic sweep, an outcome its work suggests is less market-friendly.

The third is the unresolved Iran war, which Calvasina said has weighed on consumer sentiment.

Lingering investor angst over inflation, the Fed and interest rates is a further headwind, she added, noting small-cap stocks have underperformed since late June as rate-hike expectations have risen.

Despite the near-term caution, Calvasina reiterated RBC’s 12-month S&P 500 target of 8,150, about 6% above the Sept. 8 close.

"We still see a number of reasons to stay optimistic," she wrote, adding that all five of the models the firm uses to derive its target point to gains over the year ahead.