NEW YORK, Feb 24 (Reuters) - The S&P 500 stock index will gain about 10% between now and the end of the year, driven by strong earnings and steady economic growth despite ongoing worries about U.S. President Donald Trump's trade policies and disruption from artificial intelligence, according to a Reuters poll.
By the end of 2026, the S&P 500 will be around 7,500, or 9.7% above Monday's close, according to the median estimate of 44 strategists, analysts and portfolio managers polled in the past week.
The index ended Monday at 6,837.75.
The forecast is slightly higher than the target in a Reuters November poll.
If the S&P ends 2026 higher it would mark a fourth straight year of gains.
FEW PORTENTS OF WEAKNESS
"It's very difficult right now to point to where there's a lot of weakness," said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. The company's forecast for 7,500 by year-end is based on upbeat U.S. earnings and economic expectations, he said.
Among risks, Samana said, is a "lingering concern around inflation, and what that means for the Fed."
The Federal Reserve held interest rates steady last month, citing diminished risks to both inflation and employment. Traders have been pricing in a rate cut of at least one-quarter of a percentage point by around mid-year.
Nine of 13 respondents to an extra question in the poll said an S&P 500 correction in the next three months was likely.
Marc Dizard, chief investment officer at Huntington Wealth Management, said a correction would be "healthy," as he still expects the market to end the year at 7,650, about a 12% gain from current levels.
The S&P 500's price-to-earnings ratio is currently 21.6 times forward earnings, slightly down from 22.5 at the start of the year, based on LSEG data.
JITTERS OVER TECH
After a strong 2025 that saw the S&P 500 gain about 16%, the market has meandered through the first two months of 2026. Investors have been quick to offload stocks they see as vulnerable to disruption from artificial intelligence tools, particularly software shares, which have lost roughly 23% since December 31.
Robert Pavlik, senior portfolio manager at Dakota Wealth Management in Fairfield, Connecticut, sees AI-related stocks "remaining out of favor for the majority of the year." But, he wrote, "that out-of-favor view will eventually lead participants back to the 'fold' as investors start to see these AI names as having gotten 'cheaper.'"
Technology is still expected to lead earnings gains, with analysts expecting 33% growth in 2026. S&P 500 earnings growth is expected to come in at 14.8% compared with 14.4% for 2025, according to LSEG.
"Overall, technology should be a profitable sector and that offers some support even though there's some near-term volatility," said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan.
Trump's recent statements on trade policy also create uncertainty, strategists said.
On Friday, the U.S. Supreme Court ruled that Trump overstepped his presidential authority by enacting reciprocal tariffs under an economic emergency law. Trump afterward instituted a 10% tariff on all foreign imports, with a threat to boost that to 15%. That tariff is only temporary, as it would need Congressional approval to be extended more than 150 days.
Strategists also cited tensions between the United States and Iran that could lead to higher oil prices as a risk.
The poll has the Dow Jones Industrial Average finishing the year at 52,000. The Dow closed Monday at 48,804.06.
(Other stories from the Reuters Q1 global stock markets poll package)
(Reporting by Caroline Valetkevitch; additional reporting by Chuck Mikolajczak, Sinead Carew, Chibuike Oguh and Stephen Culp in New York and Noel Randewich in San Francisco; Polling by Sarupya Ganguly and Renusri K.)
