S&P 500 targets raised by Wall Street analysts as earnings overshadow war uncertainties

Analysts on Wall Street have raised their year-end price targets on the S&P 500, which is currently trading at a record high, as a strong corporate earnings performance in the first quarter has put war-related uncertainties behind.

Ed Yardeni, a Wall Street veteran and founder of Yardeni Research, among the first to call a market bottom during the war, now sees the S&P 500 breaching levels of 8,000 by the end of the year. He revised his price target on the index to 8,235, the highest among Wall Street analysts, from 7,700 earlier.

Yardeni is also a regular feature on CNBC-TV18. You can read more about him here.

S&P 500 At 10,000?

The founder of Yardeni Research also expects the S&P 500 to hit levels of 10,000 by 2029, although he sees that happening before schedule as well.

"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."

As a result, Yardeni has also raised his Earnings Per Share (EPS) estimates for the S&P 500 to $330 from $310 for 2026 and $375 from $350 for 2027.

The Earnings-Led Rally

US equities sold off for five weeks in a row after the US attacked Iran in February-end.

However, announcements of a ceasefire, strong results, and a stronger outlook have propelled the S&P 500 to rally for six weeks in a row post that, which has turned out to be the longest weekly winning streak for the index since October 2024.

More than 85% of the companies that have reported results on the S&P 500 have surpassed expectations this quarter. Profits have grown by 27% so far in Q1, well above the consensus estimates of 12%, according to Bloomberg data.

HSBC Joins The List

Along with Yardeni, HSBC Holdings has also increased their target on the S&P 500, expecting the index to now hit levels of 7,650 by the end of the year, higher than their earlier projection of 7,500.

Despite earnings support, HSBC says sentiment remains on "shakier ground", adding that the breadth of the rally has been narrow. Yet, they say there is more room for upside as most stocks are still below their 52-week high levels.

The brokerage also expects the S&P 500 to cross the 8,000 mark soon, led by a rebound in tech sentiments, continued AI adoption and easing geopolitical and trade concerns.

Breather Due?

Even as the S&P 500 is due for a breather, CFRA Research sees the index crossing levels of 7,575 by the end of the year from 7,400 earlier.

On the breather front, CFRA cited the S&P 500's 14-day Relative Strength Index (RSI), which is at 75, while a reading above 70 indicates "overbought". In fact, 9% of the 155 sub-industries on the 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," the note said.

US Markets On Monday

Indices on Wall Street traded in a very narrow range on Monday but ended higher, even as US President Donald Trump said that the ceasefire with Iran is currently on "life support." Both the S&P 500 and Nasdaq ended the session higher.

The big trigger today is going to be the inflation figures for the month of April. Analysts expect a 0.6% increase month-on-month after the 0.9% increase in March. Core CPI too, may increase by 0.3% month-on-month from the 0.2% increase in March.