Morgan Stanley expects the S&P 500 (SPX) to reach 7,800 by the end of 2026, powered by a bull market still in its “early days” that began in April 2025. The price target implies upside of about 16% from current levels.
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“Risk assets are primed for a strong 2026, powered by micro fundamentals, accelerating AI capex, and a favorable policy backdrop,” said the bank.
Earnings Acceleration and Dovish Fed Set Stage for 2026 Rally, Says Morgan Stanley
Morgan Stanley expects the benchmark index’s earnings growth to accelerate by 17% to $317 in 2026 compared with its 2025 estimate of 12%.
Furthermore, lower rates could help boost stocks, with the bank expecting “accommodative” monetary policy from the Fed given a weakening labor market and the Trump administration’s push to “run it hot.”
If Morgan Stanley’s price target plays out, 2026 would mark the fourth consecutive year of double-digit gains for the S&P 500.
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