Analysts set new S&P 500 target for end of 2026

Wall Street strategists have lifted their outlook for the S&P 500, projecting the benchmark will climb past 7,000 in the coming months. 

The analysts believe the index will end the year at 7,500, implying gains of roughly 10% from current levels.

The forecast, based on a recent Reuters survey of 44 strategists, analysts, and portfolio managers, places the index about 9% above its current value of 6,892. 

If achieved, it would mark a fourth consecutive year of advances for the large-cap gauge and a modest upgrade from projections issued late last year.

The upbeat outlook is anchored in expectations of solid corporate earnings and steady economic expansion. 

The surveyed analysts anticipate S&P 500 earnings growth of 14.8% in 2026, slightly ahead of the 14.4% estimate for 2025. Technology companies are expected to drive much of that expansion, with profit growth in the sector seen rising by roughly 33% next year.

At the same time, valuations remain elevated but have eased slightly. The index currently trades at about 21.6 times forward earnings, down from 22.5 at the start of the year, suggesting some moderation in pricing even as fundamentals remain supportive.

Despite the constructive year-end target, many strategists see turbulence ahead. A majority of respondents expect a market correction within the next three months, viewing a pullback as a potential reset rather than a shift in the broader trend.

Upcoming risks 

Key risks include persistent inflation pressures and the trajectory of Federal Reserve policy, particularly as investors weigh the timing of potential rate cuts. Trade tensions linked to U.S. President Donald Trump’s policies and broader geopolitical shocks also remain sources of uncertainty.

It’s worth noting that technology shares have shown heightened volatility in early 2026, especially in segments perceived as vulnerable to disruption from artificial intelligence. 

Software stocks have declined sharply since the start of the year, reflecting investor caution. Even so, the sector is still projected to lead overall earnings growth, reinforcing the broader bullish case.

While near-term jitters persist, the consensus view points to resilient corporate performance and steady economic conditions supporting further gains for the S&P 500 through the end of 2026.

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