By Martin Baccardax

The S&P 500 still has the potential to book a double-digit gain for the year, according to analysts at Barclays, as a resilient economy powered in part by tech and innovation helps boost corporate profits and offsets risks tied to higher commodity prices and private credit concerns.

However, the broader impact from the U.S.-led war with Iran will keep oil prices higher well into the summer months and beyond, stoking inflation pressures and complicating the Federal Reserve's policy response. That means the path for stocks remains "bumpy" until markets can stabilize their first quarter slide, Barclays analysts led by Venu Krishna said in a note published Tuesday.

"The U.S. enters the fray from a position of economic strength," they wrote. "Durable consumption, a labor market that is slowing but not collapsing, growth impulse from [the One Big Beautiful Bill Act] and expanding artificial intelligence investment."

"Our baseline is that concerns over AI disruption, private credit and geopolitics reflect real and material risks, but ones that will nonetheless fall short of derailing the current growth cycle at this point in time," he added.

Krishna and his team lifted their end of year price target for the S&P 500 by 250 points, taking it to 7650 points, a level that largely matches the Wall Street consensus and implies a gain of around 16.4% from Monday's close. Its bull case target of 8200, however, would suggest the potential for a 25% advance.

Earnings growth remains the key component of the bank's forecast boosts, with Barclays now pegging collective S&P 500 profits to rise 15% from 2025 levels to around $321 a share. Its prior forecast from November put that figure at around $305 a share.

Reflecting the bank's view of broader market risks that still linger over stocks heading into the start of the second quarter, its bear case price target sits at 5900, a 10% pullback from current levels.

The biggest overhang is the threat of both elevated, and rising, crude oil prices tied to the U.S.-led war with Iran and its impact on both core and headline inflation.

Brent crude futures for June delivery, the global pricing benchmark, were last trading at around $103.50 a barrel, having gained more than 40% so far this month and around 70% since the start of the year. Brent averaged around $69 a barrel last year and $80 a barrel in 2024.

"At the same time, the recent spate of private credit redemption pressures and restructuring moves underscore heightened uncertainties in the financial economy as well as the real economy," the bank said. "Simultaneous deterioration across both dimensions threatens a sharper derating to the downside than our upside scenario assumes in the other direction."

Krishna and his team also noted that upward inflation pressures, and any lending or growth scare the emanates from private credit markets, could affect the Fed's current projection for rate cuts over the next two years.

"Prolonged commodity price pressure risks forcing the Fed into an unenviable corner: tolerate an upside inflation overshoot or re-tighten into a soft labor market," he said. "Meanwhile, private credit stress underscores how the distribution of outcomes has shifted left for the financial economy as well as the real economy."

Write to Martin Baccardax at martin.baccardax@barrons.com

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March 24, 2026 12:09 ET (16:09 GMT)

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