Several Wall Street firms have issued bullish S&P 500 (SPX) price targets, and RBC Capital Markets just joined the wave. The firm expects the benchmark index to rise to 7,750 over the next 12 months, implying upside of 13.6% from current levels.
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RBC Head of U.S. Equity Lori Calvasina cites strong earnings growth and falling rates as catalysts to push the market higher. “Historically, when the Fed has made modest cuts in a 12-month period that amount to 1% or less, the S&P 500 has gone up by 13.3% on average during that same time period,” said Calvasina.
Value Shift Expected to Extend Into 2026
Calvasina noted that investors have recently begun to rotate into value stocks and the broader market from growth and tech stocks, and she expects this phenomenon to continue into 2026. Furthermore, she forecasts a “stagflation light” economy where inflation remains above 2% amid healthy economic growth.
In terms of downside risk, Calvasina expects pullbacks to stay in the 5%-10% range unless the risk of recession rises significantly.
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