S&P 500 Could Hit 7,300 by 2026 as Bull Run Shows “Plenty of Life”

SocGen upgrades outlook, citing AI investment, strong margins and expected Fed rate cuts

The S&P 500 could climb to 7,300 points by the end of 2026, according to a newly upgraded forecast from Société Générale strategists. The revised target marks a significant jump from the bank’s previous projection of 6,900 made in August, signalling renewed confidence in the longevity of the current market rally.

With the index closing at 6,765.88 on Tuesday, SocGen’s outlook implies an 8% upside over the next two years.

A Bull Market Far from Over

Lead strategist Manish Kabra said it is “too early to call the bull run over”, highlighting a combination of economic, structural and policy-driven forces that could continue lifting equities.

SocGen identifies several key drivers behind its bullish stance:

• The One Big Beautiful Bill Act is expected to deliver strong fiscal stimulus.
• Profit margins are widening across multiple sectors, not just within technology.
• Corporate activity is increasing, pointing to rising confidence among businesses.
• AI-driven capital expenditure continues to accelerate, supporting productivity and revenue growth.
• Corporate leverage remains manageable despite rising borrowing levels.

These factors collectively suggest that the market still has solid foundations, even after a rapid rise over the past two years.

Interest Rate Cuts Could Deliver a Further Boost

SocGen strategists also expect the Federal Reserve to begin cutting interest rates, potentially as early as 2025, which they say would act as an additional catalyst for share prices. Lower borrowing costs could:

• Support corporate investment
• Ease financial conditions
• Lift valuations across multiple sectors

This anticipated policy shift is particularly important as inflation continues to ease and economic growth stabilises.

Outlook: Gradual Gains with Structural Tailwinds

While risks remain — including geopolitical tensions and uncertainty around global growth — SocGen’s analysts believe the structural support from AI investment, healthier balance sheets and targeted fiscal policy sets the stage for steady market gains into 2026.

Their 7,300-point target underscores a broader view shared by several Wall Street firms: that the S&P 500’s upward trajectory may still have room to run, driven by long-term technological and corporate tailwinds.

Sources: (Investing.com, ChatGPT)