- Wall Street expects the S&P 500 to rally through 2026, driven by AI-led earnings growth
- Goldman Sachs and Citigroup forecast the S&P 500 reaching 8,000 or higher by end-2026
- UBS, Citigroup, and HSBC target the S&P 500 at 8,100 amid ongoing AI investment cycles
Wall Street's bullish outlook for US equities is holding firm, with major global brokerages expecting the S&P 500 to extend its rally through 2026, driven by artificial intelligence-led earnings growth and resilient corporate profits. Strategists expect the strength in AI-related earnings to offset some of the near-term economic damage from the war in Iran, although concerns over higher inflation, elevated energy prices and disruptions to global oil flows remain key risks for investors.
Goldman Sachs and Citigroup are among the major brokerages expecting the benchmark S&P 500 index to reach 8,000 or higher by the end of 2026. UBS Global Research, UBS Global Wealth Management, Oppenheimer Asset Management, Citigroup and HSBC have among the highest targets at 8,100.
The bullish forecasts come despite the uncertainty created by the conflict in the Middle East. Strategists expect the AI investment cycle to remain a key driver of corporate earnings, particularly for technology and other companies benefiting from rising demand for AI infrastructure and services.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
S&P 500 Target Forecasts For 2026
Among the more optimistic forecasts, UBS Global Research, UBS Global Wealth Management, Oppenheimer Asset Management, Citigroup and HSBC have set an S&P 500 year-end target of 8,100. Goldman Sachs, Morgan Stanley, Jefferies, J.P. Morgan, Deutsche Bank and Societe Generale expect the index to reach 8,000. Barclays has a target of 7,950, while RBC Capital Markets and Stifel expect the index to end the year at 7,900.
READ | Wall Street Set To Open Higher? Slipping Oil Among Three Reasons Lifting US Stock Futures
Seaport Research Partners has forecast 7,800, while Evercore ISI expects 7,750. Wells Fargo has a target of 7,700, followed by Canaccord Genuity and BNP Paribas at 7,500. BofA Global Research remains among the most cautious major brokerages, with a year-end target of 7,400.
The Wells Fargo Investment Institute has provided a target range of 7,800-8,000.
AI Earnings Key To Bull Case
The central argument behind the bullish forecasts is that the AI investment boom could continue to translate into stronger corporate earnings, helping the market absorb the impact of geopolitical and macroeconomic shocks. The rapid expansion of AI infrastructure has driven heavy investment in data centres, semiconductors, cloud computing and related technologies. Strategists expect this spending cycle to support earnings growth and sustain investor appetite for AI-linked stocks.
However, the outlook is not without risks. A prolonged conflict in the Middle East could disrupt global energy supplies and push oil prices higher, adding to inflationary pressures. Higher inflation could in turn limit the scope for monetary easing and put pressure on equity valuations.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
