Reviewed by Gotrade Internal Analyst
Jakarta, Gotrade News - UBS has just released a bullish projection, predicting that US market strength will carry on into 2026 with a target of 7,700 for the S&P 500. This sends a crucial signal to investors: the current rally is backed by fundamental company performance, not just excessive market speculation.
Key Takeaways
- UBS targets the S&P 500 to reach 7,700 in 2026, driven by 10% corporate earnings growth.
- Fed easing and regulatory clarity on trade are expected to be positive catalysts for risk assets.
- Wall Street is split; while most big banks are optimistic, Bank of America remains cautious with a lower target.
In an investor note dated December 22, the Swiss banking giant noted that strong profit growth—especially among big tech firms—has been supporting share prices. This keeps the market’s foundation intact without pushing valuations into unsustainable territory.
According to UBS, corporate earnings across the S&P 500 are expected to expand by roughly 10 percent in 2026. Based on this outlook, the bank sees room for the index to climb toward the 7,700 area, assuming earnings remain the primary driver for price gains.
The bank also anticipates the Federal Reserve will continue easing into early 2026 as inflation cools off. Lower borrowing costs are expected to support risk assets, coupled with expectations of a more accommodative policy stance from the new Fed leadership.
Beyond monetary factors, UBS highlights that clarity on trade and regulatory issues will be supportive. Legal certainty regarding tariff authority in early 2026 is predicted to reduce investor uncertainty, even if any direct economic impact proves to be temporary.
Wall Street Divided
Beyond the UBS outlook, major Wall Street banks are split on where the market is heading in 2026. Bank of America Corporation is playing it safe, projecting the benchmark to end at 7,100 due to valuation pressures and risks of weakening consumption.
In contrast, most other institutions see further upside driven by AI investments. JPMorgan Chase & Co. sees the S&P 500 reaching 7,500, with potential to break 8,000 if rate cuts accelerate.
Echoing that optimism, The Goldman Sachs Group, Inc. targets the 7,600 level for the coming year. Meanwhile, Morgan Stanley offers an even higher forecast at 7,800, reflecting strong confidence in US market growth.
Reference:
- Finbold, Banking giant predicts massive 2026 S&P 500 rally. Accessed on December 24, 2025
- Featured Image: Shutterstock
Disclaimer
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