S&P 500 Hits Record 7,580; Analysts See Further Gains

The S&P 500 rose to a record 7,580 last week, roughly 20% above its low earlier this year, moving into a bull market. Wall Street strategists from Yardeni Research to Citi published upside targets as high as 8,250, with several major firms projecting a range between about 7,900 and 8,100.

Analysts point to heavy inflows into exchange-traded funds tied to the index. Vanguard’s S&P 500 ETF, VOO, has taken in more than $64 billion year to date and is approaching $1 trillion in assets. With an expense ratio of 0.03%, a $1 trillion VOO would generate roughly $300 million in annual fee revenue for Vanguard.

Corporate results have been stronger than many expected. About 97% of S&P 500 companies have reported results for the most recent quarter, and aggregate earnings growth averaged 28.6%, the highest since the fourth quarter of 2021. Nvidia reported revenue growth near 85% in the first quarter.

Valuation measures show a forward price-to-earnings ratio near 21.2, above the five-year average of 19.9 and the ten-year average of 18.9. Yardeni Research’s target sits at 8,250. Oppenheimer projects 8,100. Goldman Sachs and Morgan Stanley project roughly 8,000, and Citi projects about 7,900.

Geopolitical developments have affected energy and fixed-income markets. Negotiations over a proposed 60-day ceasefire involving the U.S. and Iran have raised the prospect of reopening the Strait of Hormuz. Brent crude has traded near $92 a barrel and West Texas Intermediate near $87. U.S. Treasury yields declined alongside oil prices: the 10-year yield moved from about 4.687% to roughly 4.437%, the two-year from about 4.18% to near 4.0%, and the 30-year to about 4.97% from earlier highs.

Technical indicators show the index climbed from a March low near 6,310 to the current record, clearing the early-year resistance level around 7,000 and remaining above commonly watched moving averages. The Relative Strength Index stands near 73, a level that market participants associate with strong momentum and an elevated chance of a short-term pullback.

Forecasts differ on the next moves. Some strategists project the S&P 500 extending gains to near 8,000. Others forecast a brief pullback toward the 7,250 area before prices move higher again. Risks noted by market observers include a slowdown in earnings growth, renewed geopolitical tensions and changes in U.S. interest-rate expectations.