The playbook from the last monster rally would take the S&P 500 to 10,675. What's different this time.
The S&P 500 has surged nearly 13% from its recent low on March 30, making it the quickest oversold-to-overbought move since 1982. If the 1982 rally pattern repeats, the S&P 500 could reach 10,675 by June 2027, but differences in macroeconomic conditions and market valuations may affect the outcome.
The S&P 500 closed at a record high on Friday, having jumped nearly 13% from its March 30 low. This rebound is the fastest oversold-to-overbought move since 1982, according to Evercore ISI strategist Julian Emanuel. Emanuel notes that the 1982 rally occurred after a secular peak in inflation and interest rates, whereas current inflation remains sticky above the Fed's 2% target. The current market valuation is also much higher than in 1982, with price-to-earnings ratios at 25 times compared to 8 times then. Emanuel warns that geopolitical uncertainty and oil prices could impact the market, with a spike in oil prices potentially leading to a retest of the March 30 lows. However, if oil prices fall sustainably below $76.73, Emanuel sees potential for gains similar to those in 1982. Evercore ISI's base case is for the S&P 500 to climb to 7,750 in 2026, driven by tech stocks.
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