Strategists cited by Reuters expect strength in AI-related earnings to provide support for U.S. equities even as the conflict in the Middle East raises concerns over inflation, energy supply disruptions and weaker economic growth.
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HSBC and UBS Global Wealth Management have raised their S&P 500 targets above the 8,000 mark, while Barclays also increased its forecast to 7,950. The higher targets reflect expectations that strong corporate profitability and continued investment in AI will help sustain equity gains despite elevated geopolitical risks.
Reuters reported that Wall Street’s forecasts for the S&P 500 for 2026 vary considerably, reflecting differing views on the outlook for earnings, interest rates and the broader economy.
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BofA Global Research has set the lowest target among the listed brokerages at 7,100, while Jefferies, Canaccord Genuity and BNP Paribas have each forecast 7,500.Evercore ISI expects the index to reach 7,750, followed by Seaport Research Partners at 7,800 and RBC Capital Markets at 7,900.
Wells Fargo and Barclays have targets of 7,950, while J.P. Morgan, Deutsche Bank, Societe Generale, Goldman Sachs and Morgan Stanley have each set targets of 8,000.
UBS Global Research, Oppenheimer Asset Management, Citigroup and UBS Global Wealth Management are among the most bullish, with targets of 8,100. HSBC has also set the same target.
The Wells Fargo Investment Institute expects the S&P 500 to finish between 7,800 and 8,000.
The forecasts underscore the importance of AI-driven earnings growth to the bullish outlook. Investors are betting that continued spending on AI infrastructure and technology will translate into stronger revenues and profits for companies across the technology sector and beyond.
At the same time, the conflict in Iran remains a key source of uncertainty. Higher oil prices and disruptions to global energy flows could push inflation higher, potentially limiting the ability of central banks to ease monetary policy and putting pressure on equity valuations.
For now, strategists appear to view the earnings boost from AI and resilient corporate performance as sufficient to absorb the potential short-term economic damage from the Middle East conflict, Reuters reported.
UBS Global Research and UBS Global Wealth Management are separate, independent divisions within UBS Group. The Wells Fargo Investment Institute is a wholly owned subsidiary of Wells Fargo Bank.
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