A blistering rally has pushed the S&P 500 Index back to all-time highs, and Wall Street veteran Ed Yardeni is confident the benchmark can breach 8,000 points by the end of 2026.
Yardeni raised his year-end price target on the 500-member gauge from 7,700 to 8,250, seeing nearly 12% upside from Friday's closing level — the highest among strategists tracked by Bloomberg. Strong first-quarter earnings prompted the chief investment strategist of the eponymous Yardeni Research to boost his prediction.
He also raised earnings per share estimates to $330 from $310 for this year, and $375 from $350 for 2027. He said previous estimates were no longer seen as bullish, noting consensus estimates have "rocketed above our targets."
"We've never seen consensus earnings expectations rise so quickly for the current and coming years as they have in recent months," Yardeni wrote in a note published on Sunday. "The result has been an earnings-led meltup in the stock market."
Equities sold off for five straight weeks immediately after the US attacked Iran in late February. But a combination of an improving outlook on the Middle East conflict, along with strong earnings have helped the S&P 500 turn around to clock in a six-week rally — its longest run of weekly gains since October 2024.
Yardeni is not the only one to raise price targets for the equity benchmark. HSBC Holdings Plc strategists Nicole Inui and Alastair Pinder see the benchmark finishing the year at 7,650 points, an increase from their previous target of 7,500, on earnings strength and technology stocks coming back. And CFRA Research's Sam Stovall raised his year-end estimate to 7,575 from 7,400 last week.
Even with earnings remaining supportive, Inui and Pinder point to sentiment being on "shakier ground," adding that the rally has been narrow in breadth. As most stocks are still trading below 52-week highs, there is room for further upside.
Much like Yardeni, however, Inui and Pinder see potential for the S&P 500 to breach 8,000 points, powered by "a rebound in sentiment across tech, continued AI adoption, and an easing of concerns around geopolitics, trade, and rates," they wrote in a Monday note to clients.
Though, the S&P 500 could be due for a breather, CFRA Research's Stovall said. The S&P 500's 14-day relative strength index, a technical measure of momentum, is sitting at 75, above the 70 level that implies the security has become overbought.
There are also overbought readings for the Nasdaq 100 Index as well as the S&P 500's sub-indexes for information technology and communication services. Additionally, 9% of the 155 sub-industries on the wider S&P 1500 Index are also giving overbought signals.
"CFRA thinks a digestion of these recent gains would offer this bull the opportunity to 'buy the dip' and resume its run," Stovall said in a note published on Monday.
Ultimately, lingering hostilities in the Middle East present one of the key risks to the stock market's rally. Washington and Tehran have yet to agree on ending the war, with President Donald Trump saying the U.S.-Iran ceasefire is "unbelievably weak."
While equities have been less rattled by developments from the region, oil prices have remained elevated. As Yardeni explains, another round of fighting "could be even more troublesome" as it may result in stagflation.
Still though, Yardeni remained confident in this bull run continuing — and what he dubbed the "roaring 2020s" finishing on a high note.
"Nevertheless, for now, we are sticking with our 10,000 target for the S&P 500 by the end of 2029," Yardeni said, adding that "it might arrive ahead of schedule."
(Credit: Christopher Goodney/Bloomberg)
Copyright 2026 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.