The American stock exchanges, a theatre of dreams and, increasingly, of delusion, list some five and a half thousand companies. A considerable number, naturally, find their way into the various indices, those arbitrary measures of national prosperity. One, the S&P 500, has become, by convention if not by inherent virtue, synonymous with the health of the American economy. Its recent performance, and the predictions for its future, deserve, perhaps, a moment’s detached scrutiny.
Established in 1957, the index tracks the fortunes of five hundred large enterprises, representing, it is claimed, approximately eighty per cent of the nation’s equity value. Admission to this gilded club is, of course, governed by a series of criteria – profitability, liquidity, a minimum market capitalisation of twenty-two billion dollars – all designed to maintain the illusion of seriousness. One suspects the true requirement is simply a capacity to inflate the numbers, at least for a season.
As of February of this year, the principal players – Nvidia, Apple, Microsoft, and the usual suspects – held sway. Their dominance, however, does not necessarily equate to resilience. The index, over the past thirty years, has yielded an average annual return of 8.1 per cent, a figure which, while respectable, is unlikely to sustain itself indefinitely. The last decade witnessed a more extravagant 13.6 per cent, while the previous twenty years enjoyed a heady 8.8 per cent. Such exuberance rarely ends well.
Wall Street, predictably, anticipates further gains. The prevailing forecast for the remainder of 2026 suggests a further advance of ten per cent, bringing the full-year return to a rather implausible twelve per cent. This optimism is fuelled by a familiar cocktail of tax cuts – a legacy of the previous administration’s fiscal fantasies – the relentless hype surrounding artificial intelligence, and the ever-hopeful expectation of interest rate reductions. One might be forgiven for observing that the market operates on little more than wishful thinking.
| Wall Street Firm | S&P 500 Year-End Target | Upside |
|---|---|---|
| Oppenheimer | 8,100 | 17% |
| Deutsche Bank | 8,000 | 15% |
| Morgan Stanley | 7,800 | 12% |
| Seaport Research | 7,800 | 12% |
| Evercore | 7,750 | 12% |
| RBC Capital | 7,750 | 12% |
| Citigroup | 7,700 | 11% |
| Fundstrat | 7,700 | 11% |
| UBS | 7,700 | 11% |
| Yardeni Research | 7,700 | 11% |
| Goldman Sachs | 7,600 | 10% |
| Canaccord Genuity | 7,500 | 8% |
| HSBC | 7,500 | 8% |
| Jefferies | 7,500 | 8% |
| JPMorgan Chase | 7,500 | 8% |
| Wells Fargo | 7,500 | 8% |
| Barclays | 7,400 | 7% |
| CFRA Research | 7,400 | 7% |
| Societe Generale | 7,300 | 5% |
| Bank of America | 7,100 | 2% |
| Median | 7,650 | 10% |
The table, a testament to the collective delusion of the financial community, suggests a continued upward trajectory. The median forecast projects a gain of approximately ten per cent by the year’s end, bringing the index to 7,650. One might note, however, that Wall Street’s predictive abilities are, shall we say, imperfect. The estimates for 2025 were off by five per cent, and those for 2024 by a rather more alarming twenty-five per cent. Investors, therefore, would be wise to treat these projections with a healthy dose of scepticism.
Should the S&P 500 reach 7,650 by December 31st, it would represent a substantial return, surpassing the twenty-year and thirty-year averages, though falling short of the more extravagant gains of the previous decade. The spectacle, however, is unlikely to last. The market, like all things, is subject to the laws of gravity. And when the bubble bursts, the consequences, as always, will be borne by those least equipped to withstand them.
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2026-02-26 12:12