The S&P 500 is projected to reach 7,600 by year-end, representing a 6% gain from…
The S&P 500 Is Forecast to Climb as Earnings Growth Powers Stocks Higher
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Goldman Sachs Research raised its S&P 500 forecast for year-end 2026 to 8000, up from 7600, projecting a 6% return (as of May 26).
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Our strategists raised their earnings per share forecasts to $340 for 2026 (representing 24% annual growth) and $385 for 2027 (13% growth). AI-infrastructure beneficiaries are expected to account for roughly half of the earnings growth this year.
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The valuation multiple for US stocks is expected to remain flat at roughly 21 times earnings as modest declines in Treasury yields are offset by slowing growth, geopolitical uncertainty, and investor skepticism about the durability of AI-related profits.
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While conditions mostly support a bull market for stocks, a sharp increase in momentum and narrow market breadth are emerging as cautionary signals.
The US stock market’s strong rally in 2026 has been powered entirely by corporate profit growth rather than rising stock valuations, according to Goldman Sachs Research. That dynamic is expected to continue through the rest of the year and into 2027.
What is the outlook for the S&P 500 in 2026?
The S&P 500 is forecast to rise to 8000 by the end of this year, up from an earlier projection of 7600, reflecting upgraded earnings estimates, according to Ben Snider, chief US equity strategist in Goldman Sachs Research. The rally would mark a 6% gain (as of May 26). The team projects S&P 500 earnings per share (EPS) of $340 in 2026, a 24% increase from the prior year, and $385 in 2027, representing 13% growth.
First-quarter earnings were “exceptionally strong,” Snider writes in a report. Earnings increased 18% year over year, and the median company in the index is on track for its strongest quarterly growth rate in the past decade outside of the period following the US tax cuts in 2018 and the post-pandemic reopening.
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