Several Wall Street companies hiked the S&P 500 year-end outlook and eased concerns related to the ongoing strength of the artificial intelligence trade and tariffs. Deutsche Bank said the Broad Index could end the year at 6,550 to 7,000. Wells Fargo said it expects the average to close 2025 at 6,650. This is 250 points higher than the latest forecast set by the bank’s Investment Institute. Barclays has raised its year-end price target to 6,450 by 400 points. The S&P 500 hit a new record high of 6,550 early Wednesday, following some tamed inflation data. The companies said it would help investors overlook the economic concerns caused by the weakening of the labour market than initially anticipated the impact of inflation from President Donald Trump’s taxation. Investors also received positive signals on the AI ​​front on Tuesday, and analysts were surprised by the expectations of Oracle’s cloud growth. “When AI Capex stops, the music stops. Enjoy the party,” Wells Fargo analyst Ohsung Kwon wrote to his client in a note Tuesday night, using shorthand to use capital expenditures. “Yes, there’s bubbles,” Kwon added. “However, as long as AI Capex remains intact, the bull market must continue,” Kwon said the S&P 500 could rise to 7,200 by the end of 2026. . However, according to CME’s FedWatch tool, Fed fund futures will certainly be reduced by 100% when the central bank meets next week. “We expect inflation to win some, but we believe it is likely to be seen as conservative in size compared to 2021-2022 and temporary,” Binky Chadha, Deutsche Bank’s US equity and global strategy, wrote to clients in a memo on Wednesday, announcing his year-end target increase. Chada had acknowledged a noble stock valuation, but he said it was driven highly by its payout ratio and expectations for resilient revenue growth. (Chada will be taking part in CNBC’s “exchange” at 1pm on Wednesday to discuss the new forecasts.) Benkrishna, head of Berkeley’s US equity strategy, said that the macroen environment should lower interest rates three times three times before the end of 2025 as a way to “counter-balance” the macroen environment. He describes the company’s revenue as “solid,” and says that global GDP growth is showing signs of stabilization. Krishna has increased the 2026 S&P 500 target by 300 points to 7,000. One factor in that excitement is the fact that he is currently positive across the technology space, poised to remain a secular growth narrative, exaggerating concerns about AI disruption within software companies. “The macros are under pressure, but we get a ‘halfful glass’ view,” Krishna wrote to her client in a note on Tuesday.
Citing AI trade, three major investment banks have raised stock market forecasts and reduced tariff impact
