Wall Street lifts S&P 500 targets as record rally accelerates

Wall Street’s bull case for stocks is getting bolder even as the S&P 500 has already climbed 16.5% from this year’s low and closed Friday at another record. The index first crossed 7,400 on May 8, then kept moving higher alongside the Nasdaq, a rally powered by Nvidia, Sandisk and other AI-linked names even as geopolitical worries around the Strait of Hormuz and U.S.-Iran tensions lingered in the background.

Ed Yardeni, one of Wall Street’s most closely watched market strategists, pushed his 2026 year-end S&P 500 target to 8,250 from 7,700. In notes to clients, Yardeni said he now expects S&P 500 earnings per share of about $330 in 2026 and revenue per share of about $2,200, reflecting how quickly consensus profit forecasts have moved higher. He described the pace of those revisions as unusually fast, a sign that the market’s advance is being underwritten by optimism on corporate profits as much as by valuation expansion.

RBC Capital Markets also lifted its 12-month S&P 500 target, raising it to 7,900 from 7,750. Its case rested on resilient earnings growth and continued strength in AI-linked sectors, reinforcing the view that the market’s hottest trade is still tied to capital spending on artificial intelligence infrastructure, chips and related software. In prediction markets, the crowd has joined the move: Kalshi traders were pricing roughly 59% odds that the S&P 500 will cross 8,000 in 2026.

The rally has also benefited from macro support. A stronger-than-expected U.S. jobs report eased labor-market worries and helped extend the advance, reducing immediate fears that the economy is rolling over even as investors debate how long growth can stay this strong. That combination of firmer payrolls, AI enthusiasm and persistent momentum has kept dip buyers active and left bearish bets struggling to gain traction.

The bigger question is whether this is durable growth or late-cycle exuberance. Yardeni’s 8,250 call implies that today’s record run still has room to expand if earnings keep rising as fast as forecast. But the gap between market targets and the broader economy is wide, and the market is now leaning heavily on one powerful assumption: that AI investment, profit revisions and investor confidence can keep outrunning the usual limits of a mature expansion.