• Wells Fargo recently raised its S&P 500 index target for end-2026 to 7,950 from 7,300.
• The upward revision is attributed to stronger corporate earnings, an interim U.S.-Iran agreement that eased macroeconomic risks, and a recent market pullback that reshaped investor sentiment.
• The new target implies the S&P 500 still has nearly 6% upside.
June 17 – Wells Fargo recently lifted its S&P 500 index target for end-2026 to 7,950 from 7,300, citing stronger corporate earnings, an interim U.S.-Iran agreement that alleviated macroeconomic risks, and a recent market pullback that reset investor sentiment.
The new target suggests the index still has nearly 6% upside. On Tuesday, the S&P 500 fell 42.94 points, or 0.57%, to close at 7,511.35, dragged by technology stocks.
In its latest research report, Wells Fargo raised its 2026 S&P 500 earnings per share (EPS) forecast to $340 from $315, reflecting strong earnings growth momentum and steadily improving corporate fundamentals.
The bank also raised its 2027 S&P 500 EPS forecast from $365 to $390.
Wells Fargo said geopolitical tensions have eased following the U.S.-Iran agreement, reducing the macro uncertainty that had been weighing on markets.
The bank also said it still views inflation as the biggest risk to equities, but added that stocks could still serve as a hedge if the Federal Reserve allows the economy to overheat.
So far this year, the S&P 500 has climbed nearly 10%, driven mainly by the AI trade and by developments related to the Iran situation.
Wells Fargo noted that the recent equity selloff has also cooled investor positioning, with market sentiment falling back to “neutral” levels, creating room for further upside.
“Sentiment has been reset, providing room for the AI trade to move higher. The race among hyperscale cloud providers to raise capital also offers strong tailwinds for the semiconductor and infrastructure sectors,” the bank added.
In the near term, Wells Fargo maintains a constructive view on risk assets, particularly favoring cyclical sectors and the semiconductor sector, as diminishing macro headwinds and steady earnings growth continue to support market gains.
