Barclays has lifted its year-end 2026 target for the S&P 500, citing continued strength in megacap technology and support from easier monetary policy. The bank now expects the index to reach 7,400, up from its previous 7,000 call.
The info comes via a Reuters piece.
Barclays also raised its 2026 S&P 500 earnings forecast to $305 from $295, saying tech giants are likely to outperform broader expectations as AI-driven demand remains robust even in a low-growth environment.
However, the bank sees downside risks to earnings outside the tech sector, with higher inflation and rising unemployment expected to weigh on activity and consumption. The strategists said Fed rate cuts should support valuations, particularly for cyclicals and growth names, but warned that a sharper economic slowdown remains the biggest near-term risk.
Barclays added that while tariff escalation looks unlikely, some price pressures have yet to feed through to consumers, and sentiment is already at multi-year lows. They also noted that U.S. midterm election years typically deliver softer equity performance.
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Barclays’ upgrade reinforces the bullish narrative around megacap tech and AI earnings momentum, though warnings on inflation, unemployment and consumer sentiment highlight lingering macro fragility beneath the surface.
