The S&P 500 (SPX) rose for a sixth consecutive month in October, although Evercore ISI believes that more upside is on the way with the benchmark index “on track” to reach 7,750, implying upside of about 13% from current levels, by the end of 2026.
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However, the firm also warned of elevated valuations and sentiment, saying that “near-term volatility on ‘less than perfect news’ is likely before positive 4Q seasonality begins.”
Bull Market to Continue in 2026, Says Evercore
Evercore ISI analyst Julian Emanuel added that the market continues to climb a “Wall of Worry,” which includes concerns about rate cuts, tariffs, and a higher VIX. In addition, Emanuel says that signals of a waning bull market, such as a hawkish Fed, slowing AI investments, and capital market froth, are absent.
To hedge against near-term volatility, he suggests a position in SPDR S&P 500 ETF (SPY) option strangles. Emanuel remains bullish on AI and sectors that will benefit from it over the long term.
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