S&P could hit 9,000 by end of 2026
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Sarah Grillo/Axios
The S&P 500 could rally to 7,750 by the end of next year —a 15% gain from current levels — and there's a 30% chance that the benchmark stock index could even reach 9,000 by then, says Evercore ISI, a Wall Street research firm.
Why it matters: Wall Street thinks the AI-driven bull market has plenty of upside ahead before a potential pop sends asset prices tumbling.
What they're saying: "Don't fear a bull market drawdown," writes Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, and his team. "Near-term volatility ahead is a buying opportunity, not the start of a bear market."
Zoom in: The note refers to a "big beautiful bubble" that has potential to drive the S&P up 33%, to 9,000 by the end of 2026. Even if that lofty number doesn't come within reach, the team is bullish, pointing to:
- "Animal spirits," or the optimism reflected in consumer, business and investor surveys.
- An "accommodating Fed" helping things along with interest rate cuts, which fuel the potential to hit 9,000 even further.
- Continued strength in earnings, coupled with decreased policy uncertainty.
- AI adoption generating productivity gains and "supporting corporate margins in diverse ways."
Between the lines: There's a natural comparison to the dot-com bubble, when excitement over Internet 1.0 drove equity prices to euphoric levels.
- In contrast to the late 1990s, this AI-driven bull market has produced gains outside of just tech, with utilities and industries keeping pace with the technology sector's year-to-date gains.
Yes, but: The Evercore ISI team still expects the run-up in asset prices to end in a bubble.
- "But before a Bubble expands and ultimately bursts, this Bull Market has a period of "rational exuberance" ahead of it," they write.
- The team cautions that "palpitations" or volatility is not always an urgent sell signal, but rather a natural part of tech adoption cycles. They recommend hedging to manage fear rather than selling.
One fun thing: Emanuel cites the lyrics to the song "Once in a Lifetime" by Talking Heads in his research.
- "With apologies to the great David Byrne and Talking Heads. It isn't "Once in a Lifetime." It's Twice."
