Overview
- Brokerage year-end S&P 500 targets now cluster roughly 7,100–8,100, with an LPL average near 7,269 and Deutsche Bank at 8,000.
- Analysts expect roughly 15% S&P 500 earnings growth in 2026, with gains broadening beyond mega-caps as AI-related capex and policy support lift profits.
- Markets price at least two Fed rate cuts next year, and BofA also projects two reductions alongside a 7,100 S&P 500 and 2.4% U.S. Q4/Q4 GDP.
- Valuations remain stretched near 22.4x forward earnings, and new Fed research estimates recent tariff policies could shave 0.3–0.5 percentage points from annual GDP.
- Strategists flag a fragile setup—softening labor trends, concentrated leadership and AI return-on-investment questions could sustain volatility even if the baseline stays positive.