As the year draws to a close, several top Wall Street investment banks have released their outlooks for the S&P 500 in 2026. While target levels vary, the consensus is that US stocks are poised to extend their gains, driven by sustained AI investment, a shift to looser monetary policy, and broadening earnings growth.

**HSBC: S&P 500 Could Reach 7,500 by End-2026** HSBC projects the S&P 500 to hit 7,500 by the end of 2026, anticipating a second consecutive year of double-digit gains fueled by AI investment. Nicole Inui, Head of Equity Strategy for the Americas at HSBC, noted that S&P 500 earnings per share (EPS) are expected to grow by 12%, supported by macroeconomic stability, easing policy uncertainty, and the AI boom.

The bank forecasts a "two-speed" US economy in 2026, with AI-driven strength offsetting cautious consumer spending. HSBC expects US GDP growth of 1.7% (below consensus) and inflation rising to 3%, above the Fed’s 2% target. Inui warned of widening income inequality due to delayed Fed rate cuts, sticky inflation, and reduced fiscal support.

HSBC’s target is based on $300 EPS (12% YoY growth) and a 25x P/E multiple. Key risks include labor market deterioration and escalating trade tensions.

**Société Générale: S&P 500 Could Hit 7,300 Amid Above-Trend Growth** Société Générale predicts the S&P 500 could reach 7,300 in H1 2026, holding steady through year-end, based on $333 EPS and a 22x valuation. The bank outlines a bear case of 6,700 and a bull case of 7,700, reflecting policy uncertainty.

The Fed is expected to cut rates twice before Chair Powell’s term ends in May 2026, with leadership changes potentially boosting sentiment. Strong fiscal support and accelerating capex cycles (tech and traditional sectors) are seen as growth drivers.

**Barclays Raises Target to 7,400, Citing Big Tech Strength** Barclays lifted its S&P 500 target to 7,400 (from 7,000), citing robust tech earnings and improving monetary/fiscal conditions. The bank raised its 2026 EPS forecast to $305, expecting AI-driven tech outperformance. However, non-tech sectors may underperform due to higher inflation and unemployment.

Fed rate cuts could benefit cyclical and growth stocks, but economic slowdown risks remain. Consumer sentiment is at multi-year lows, and midterm election years historically see weaker returns.

**UBS: AI Rally to Continue, S&P 500 at 7,500** UBS sees the AI-led rally extending into 2026, targeting 7,500 for the S&P 500 amid 14.4% earnings growth. Despite bubble concerns, the bank expects limited market impact.

**JPMorgan: S&P 500 Could Surpass 8,000 with Aggressive Fed Cuts** JPMorgan’s base case is 7,500 (13–15% earnings growth), but the index could exceed 8,000 if the Fed cuts rates more aggressively. The bank highlights a "K-shaped" economy, with AI winners offsetting broader weakness.

**Morgan Stanley: Buy the Dip, Target 7,800** Morgan Stanley’s Michael Wilson views recent pullbacks as buying opportunities, forecasting 7,800 for 2026. He favors consumer discretionary, healthcare, financials, industrials, and small caps.

**Deutsche Bank: Most Bullish at 8,000 on Earnings Diffusion** Deutsche Bank’s 8,000 target is the highest on Wall Street, predicated on 14% EPS growth ($320) as AI benefits spread beyond mega-caps. The bank upgraded 2026 US GDP growth to 2.4%, citing Fed easing and fiscal support.

Analysts dub 2026 a "far from平淡之年," with AI remaining the dominant theme.