The high-water mark for Wall Street’s S&P 500 (^GSPC) targets has moved up amid the market rally.
Oppenheimer chief market strategist John Stoltzfus boosted his year-end target to 7,100 from 5,950 in a note to clients on Sunday night as “progress on trade negotiations removes an uncertainty that had weighed on our market outlook.” The new target is now the highest on Wall Street and calls for another 11% rally in the S&P 500. Should it close out 2025 above 7,100, the benchmark index will have rallied more than 20% for a third straight year.
Stoltzfus is one of several Wall Street strategists who have reverted to their initial year-end forecasts after previously slashing their target during April’s near-20% tariff-driven market drawdown.
Stoltzfus’s update came just hours after President Trump announced a deal with the European Union that includes a baseline 15% tariff rate on EU goods imported to the US.
“We believe that enough ‘tariff hurdles’ have been overcome for now to reinstate our original price target for the S&P 500 of 7100 by year-end,” Stoltzfus wrote.
Stoltzfus reached his year-end target by projecting S&P 500 earnings per share at $275 for 2025 and the market trading at a forward 12-month price-to-earnings ratio of 25.8. The S&P 500 is now valued at 22.4 times next year’s earnings, above the five- and 10-year averages of 19.9 and 18.4, respectively, per FactSet data. This already has some wondering whether the market rally has become overstretched.
But strategists like Stoltzfus have been pointing out recently that corporate profits are proving more resilient than initially feared following Trump’s initial April tariff announcements.
Read more: The latest news and updates on Trump’s tariffs
With 34% of the S&P 500 having reported results, earnings in the second quarter are on pace to grow 6.4%, up from the 5% expected on June 27, per FactSet data.
Estimates for year-over-year earnings growth in the final two quarters of 2025 and for the full-year 2026 have been moving higher. As of July 25, FactSet data showed analysts expect the S&P 500 to grow earnings by 13.9% in 2026, slightly higher than the 13.8% than had been expected a month ago.
In a Sunday note to clients, Citi head of US equity strategy Stuart Kaiser pointed out that earnings guidance for future quarters has been increased more than in the prior reporting period in April. Kaiser said that, thus far, 41% of companies have raised their full-year guidance, up from 10% seen in April. Kaiser noted this is an added “tailwind” for US stocks.
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