Barclays expects AI-driven earnings strength to support stocks while a more hawkish interest-rate outlook limits valuation expansion.
HSBC raised its year-end S&P 500 target to 8,100 from 7,650, pointing to strong earnings growth and continued AI investment.
Fundstrat’s Tom Lee maintains an 8,000 year-end target and has outlined a potential path toward 8,400 to 8,800 under a stronger scenario.
U.S. equities edged lower in early morning trading Wednesday, but Wall Street strategists continue to raise their year-end targets for the S&P 500, pointing to resilient corporate earnings and continued AI investment.
In a note to investors cited by TheFly, Barclays raised its year-end S&P 500 target to 7,950 from 7,800. Head of equity strategy Venu Krishna cited a “standout earnings season” led by technology. Krishna said recent earnings results support “AI-driven earnings durability,” while a more hawkish outlook for interest rates should keep valuations in check.
Futures pointed to a softer open, with Dow Jones Industrial Average futures down 0.37%, S&P 500 futures 0.22% lower and Nasdaq futures off 0.37%.
The SPDR S&P 500 ETF (SPY) slipped 0.28%, while the SPDR Dow Jones Industrial Average ETF (DIA) fell 0.44%. The Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100, declined 0.48%. Retail sentiment around SPY remained in ‘bullish’ territory on Stocktwits over the past day.
HSBC Raises S&P 500 Target To 8,100
HSBC made a larger upward move a day earlier, lifting its year-end 2026 S&P 500 target to 8,100 from 7,650.
Head of equity strategy Nicole Inui pointed to strong earnings momentum, with S&P 500 earnings growth in the first half of 2026 approaching 40%. HSBC expects earnings to continue expanding at a 25% pace in the second half.
The firm sees AI spending as a key catalyst for semiconductors and other AI-linked companies, while a resilient consumer backdrop should support the rest of the index.
Tom Lee Sees Path To 8,000 And Beyond
Fundstrat’s Tom Lee has also steadily raised his S&P 500 outlook this year. His current 8,000 year-end target sits between the latest Barclays and HSBC forecasts.
Lee began 2026 with a 7,700 target set in December 2025 before raising it to 8,000 in June. He cited higher 2027 earnings expectations and a more conservative valuation multiple, putting the emphasis on earnings growth rather than further multiple expansion.
By July, Lee outlined a potential path toward 8,000 by year-end, with upside toward 8,400 to 8,800 under a stronger scenario. He also warned investors to expect a possible 10% to 20% drawdown between August and October.
Lee has continued to highlight AI-driven productivity, energy infrastructure investment and corporate earnings as key drivers. He has also argued that the S&P 500’s valuation multiple has compressed during the year because earnings have grown faster than stock prices.
The S&P 500 has already climbed above 7,800 this year, reaching a record intraday high of around 7,800 in August, putting Barclays’ 7,950 target within relatively close range and HSBC’s 8,100 call within reach of another 300 points.
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Prabhjote Gill has no position in any of the stocks mentioned in this article. StockTwits’ news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits.
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