"The record-setting advance has pushed the S&P 500 Index nearly 3% above the average year-end forecast among those tracked by Bloomberg, which currently stands at 6,486. Only in 2024 and 1999 have the calls lagged the market's actual return so much around this time of the year. The gap underscores what a vexing spell it has been for Wall Street soothsayers as equity prices have surged past worries about President Donald Trump's trade war and signs of a cooling in the US economy."
"Those factors have been overshadowed by surprisingly strong profit growth, enthusiasm for the Big Tech companies that are capitalizing on breakthroughs in artificial intelligence, and - more recently - the prospect of further interest-rate cuts from the Federal Reserve. As a result, strategists at Goldman Sachs Group Inc., Deutsche Bank AG and other firms have been struggling to keep up, with many boosting their outlooks repeatedly since the S&P 500 staged a surprisingly strong recovery from the drop unleashed by Trump's tariff rollout."
Sell-side strategists have repeatedly underestimated the strength of the stock-market rally as the S&P 500 has surged nearly 3% above the Bloomberg-tracked average year-end forecast of 6,486. Only 2024 and 1999 showed similar gaps at this time of year. The market advance has outpaced concerns about President Donald Trump's trade war and signs of a cooling US economy. Strong profit growth, enthusiasm for Big Tech companies leveraging artificial intelligence breakthroughs, and the prospect of further Federal Reserve interest-rate cuts have driven investor optimism. Analysts have raised S&P 500 earnings growth forecasts to 9.4%, and strategists have lifted year-end targets, including a 6,800 call from Yardeni.
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