Wall Street analysts continue to anticipate further gains for US equities before the end of 2026, with their average S&P 500 target remaining close to 8,000 despite recent market turbulence.
According to a Bloomberg survey covering 19 equity strategists, the consensus year-end forecast stands at 7,967, compared with 7,976 in September.
That target suggests an additional 4.5% advance from the index’s October 23 close of 7,623.68. If achieved, it would deliver a full-year increase of approximately 16% and extend the market’s run of double-digit annual gains to four consecutive years.
Strategists Hold Their Ground Amid Rising Risks
The latest survey showed little change in individual forecasts, with just one strategist increasing their target and another reducing it.
Their confidence has persisted despite significant market pressures, including a temporary rise in the 10-year Treasury yield above 5%, energy market disruption linked to the Iran war and renewed selling in technology shares.
“Being a strategist can be challenging at the best of times. But right now it feels as if we have to update our views at minimum on a weekly basis, if not even more,” HSBC strategist Max Kettner said.
Technology Weakness Weighs on the Index
The S&P 500 has struggled to regain momentum since reaching its record closing level of 7,818.93 on October 6.
By October 23, the benchmark had retreated approximately 2.5% from that peak, with technology stocks particularly vulnerable to concerns about the financial returns from substantial AI investment.
Thursday’s decline highlighted those worries, as Meta shares dropped more than 7% and the broader index experienced its steepest single-session fall in months.
Nevertheless, Kettner suggested that lower bond yields could create opportunities for equity investors.
“Lower yields should also give valuations some reprieve. So any dips related to the above two factors – as well as further likely turmoil in France – will likely be a good buying opportunity in the next few weeks again – more for equities than credit though,” he added.
Strong Earnings Beat Rate Masks Smaller Surprises
Corporate earnings have exceeded expectations frequently during the third-quarter reporting season, but the scale of those earnings beats has been relatively modest.
FactSet data showed that 83% of the S&P 500 companies reporting by Friday had surpassed earnings-per-share forecasts, compared with a five-year average of 78%.
However, those companies represented only around 24% of the index, and their average earnings surprise was 2.1%, well below the five-year norm of 7.5%.
Wells Fargo characterised the early reporting season as exceptionally weak when measured by the size of positive earnings surprises.
Bank of America strategist Savita Subramanian emphasised the importance of corporate outlooks.
“While we expect solid results, companies’ ability to provide reassurance on the outlook amid macro headwinds will likely be a bigger driver of performance this quarter,” she said.
With the consensus forecast still pointing towards further gains, investors will be watching whether corporate earnings guidance and easing bond yields can offset concerns about AI spending and geopolitical uncertainty.
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