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

Wall Street analysts have sharply raised their year-end price targets for the S&P 500, now trading at record highs, as strong corporate earnings in the first quarter have overshadowed war-related uncertainties. Ed Yardeni, founder of Yardeni Research, revised his target to 8,235—the highest among analysts—from 7,700 earlier, predicting the index could breach 8,000 by year-end and reach 10,000 by 2029. Yardeni also increased his earnings-per-share (EPS) estimates for the S&P 500 to $330 for 2026 and $375 for 2027, citing unprecedented growth in earnings expectations. More than 85% of S&P 500 companies reporting Q1 results have exceeded forecasts, with profits rising 27%, far above the 12% consensus estimate. The index has rallied for six consecutive weeks, its longest streak since October 2024, following a ceasefire announcement and stronger-than-expected results. HSBC Holdings raised its year-end target to 7,650, up from 7,500, while CFRA Research sees the index hitting 7,575, though it notes overbought conditions in 9% of S&P 1500 sub-industries. Despite optimism, analysts warn of a narrow rally, with most stocks still below their 52-week highs. HSBC described sentiment as 'shakier ground' but expects further upside from tech rebounds and easing geopolitical tensions. Meanwhile, the S&P 500 and Nasdaq ended Monday higher, despite US President Donald Trump stating the Iran ceasefire is 'on life support.' Market focus now shifts to April inflation data, with analysts expecting a 0.6% month-over-month increase in CPI and a 0.3% rise in core CPI. Yardeni’s bullish outlook contrasts with recent volatility, including a five-week selloff after the US-Iran conflict escalated in late February. The S&P 500’s 14-day Relative Strength Index (RSI) stands at 75, signaling potential overbought conditions, though CFRA suggests a pullback could create buying opportunities.