Bullish sentiment towards stocks is rampant in the US, as one Wall Street strategist after another raises their target for an S&P 500 Index that is repeatedly setting records.
Yet as optimism about further gains has solidified into something resembling a consensus, even the most bullish are clear-eyed about a growing list of issues that could potentially stop the party. With valuations at among the richest levels of this century, the most commonly cited risks for a hard market landing include cracks emerging in the artificial intelligence theme, percolating damage from President Donald Trump’s trade war, swelling government debt loads and a weakening labour market.
“All new highs are positive, except for the final one,” Sam Stovall, chief investment strategist at CFRA, said by phone. He does expect the rally to continue, partly because US stocks are hitting records at the same time as other developed equity markets, which has been a strong signal historically.
Many on Wall Street are treating these concerns like the risk factors in the prospectuses of the many IPOs hitting the market these days – they’re real and strategists and investors are aware of them, but they aren’t being scared away.
Strategists at Deutsche Bank, Barclays, Wells Fargo, US Bank and Yardeni Research all raised their price targets on the S&P 500 in the past week. Looking further out, Goldman Sachs and Morgan Stanley also published bullish outlooks for 2026 on expectations that Federal Reserve rate cuts expected to begin on September 17 could spur a further rally.
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