The latest bullish call comes from UBS Global Wealth Management, who revised their year-end target for the S&P 500 to 7,900. The brokerage firm previously forecast the US benchmark index to close out the year at 7,500.
In their latest note, they mentioned that US equities have remained resilient despite the negative headwinds from the Middle East conflict. That comes as the market is driven up by hopes of an end to the war, strong Q1 earnings, and continued AI momentum.
As such, they view that Wall Street will continue to tear it up in the second-half of the year and close things out with another 6% gain from current levels.
Adding to that call, Morgan Stanley is also one to turn more bullish in their outlook on US stocks earlier this week. The firm is now expecting the S&P 500 to hit 8,300 over the next 12 months, as stronger earnings performance will continue to outweigh all the noise any negativity from everything else.
They also lifted their year-end target for the US benchmark index to 8,000 (previously 7,800).
The main driver for their improved outlook is the stellar performance by US companies in the latest earnings season. Morgan Stanley estimates that Q1 earnings in the S&P 500 is running about 27% higher, well above expectations of roughly 12% growth that analysts have predicted prior to the run in.
As such, they argue that such resilience warrants staying constructive on US stocks. The firm sees stronger corporate profits will be able to shrug off geopolitical tensions, credit concerns, and also AI-related disruption – at least in this kind of market landscape.
That being said, they are suggesting investors to look beyond big tech and focus more on industrials, financials and consumer discretionary stocks
