finbold.com
HSBC has issued a new bullish outlook for the S&P 500, citing continued strength in corporate earnings and ongoing momentum in artificial intelligence-driven technology stocks.
In a note released on Monday, the bank’s analysts revised their outlook for the benchmark index to 7,650 from 7,500. The new target implies a potential gain of about 3.4% from the last closing value of 7,398.
The bullish outlook comes as U.S. stocks continue to hit record highs amid optimism over AI investments and strong earnings growth.
The S&P 500 also posted its biggest monthly gain since November 2020 in April, despite concerns that rising oil prices linked to Middle East tensions could fuel inflation.
HSBC expects S&P 500 earnings per share to rise about 20% in 2026 to roughly $325, with the “Magnificent Seven” technology giants continuing to lead the rally.
However, the bank warned that market sentiment remains fragile because gains have been concentrated in a narrow group of stocks.
It added that the index could surpass 8,000 points if tech valuations continue climbing, lagging sectors recover, and AI-driven earnings growth broadens across the economy.
Wall Street bullish on S&P 500
Overall, Wall Street strategists remain strongly bullish on the S&P 500 through the remainder of 2026.
For instance, Veteran market strategist Ed Yardeni of Yardeni Research stands out as particularly optimistic after raising his year-end 2026 target to 8,250. Yardeni cited upward revisions to earnings estimates, now projecting S&P 500 earnings per share of $330 in 2026 and $375 in 2027. Applying a forward price-to-earnings multiple range of 18 to 22 times results in his updated target range of 6,750 to 8,250.
Other major institutions also share the bullish outlook. J.P. Morgan lifted its year-end target to 7,600, supported by an expected 22% year-over-year earnings growth to $330 per share, while outlining a bullish scenario that could push the index to 8,000 if geopolitical risks ease.
Goldman Sachs projects the S&P 500 at around 7,600, anticipating 12% EPS growth and solid total returns for the year. Additional forecasts from firms, including Oppenheimer, Deutsche Bank, Morgan Stanley, and Citi, generally range between 7,700 and 8,100.
The median Wall Street forecast stands near 7,650, implying healthy mid- to high-single-digit gains from current levels. Notably, nearly every major strategist expects the S&P 500 to finish 2026 higher than it started the year.
Analysts project S&P 500 earnings growth of between 14% and 20% in 2026, accelerating from recent years due to widespread AI adoption, productivity gains, and resilient corporate revenues.
However, elevated valuations, geopolitical tensions, inflation surprises, potential shifts in Federal Reserve policy, and the possibility of a mid-year correction could still trigger volatility or temporary pullbacks.
While some bearish models forecast deeper declines under extreme scenarios, those views remain outliers relative to the broader Wall Street consensus.