RBC Capital Markets Boosts S&P 500 Year-End Forecast
RBC Capital Markets has reassessed its outlook on profits, suggesting that they will be stronger than anticipated. This, in turn, is likely to keep the S&P 500 elevated through the end of the year, exceeding previous projections. In a memo released on Monday, Lorica Calvasina, the head of U.S. equity strategy at RBC, increased the year-end forecast for the S&P 500 from 6,350 to 6,250. This new target, however, remains roughly 4% below the index’s current trading level.
Calvasina attributes this upward revision primarily to an increased revenue forecast for 2025, raising it from $258 billion to $269 billion. While this optimism is encouraging, she notes that strategists remain cautious as they look ahead. “We’re adjusting our price target for 2025 slightly, but we want to emphasize that we foresee S&P 500 movements gearing up in the latter half of 2026,” she remarked. Nevertheless, she’s still wary of potential market volatility for the remainder of this year.
One of her main concerns is the historically lackluster performance of the stock market during September and October in recent years, compounded by stagnating valuations in the S&P 500 and the NASDAQ-100. Calvasina has set a longer-term S&P 500 price target at around 7,100 for late 2026.
On another note, a noticeable dip in investor sentiment from the American Association of Individual Investors last month serves as a troubling indicator for the stock market’s short-term prospects. She has also pointed out signs of fatigue among retail investors, who have been a strong support for the market this year. Calvasina stressed the possibility of emerging challenges that could disrupt the current highs in stock prices.
“Our concerns revolve around the U.S. stock market being priced optimally amid growing uncertainties about the economic environment,” she wrote. “Comments from S&P 500 companies during the latest earnings reports have spotlighted potential impacts from tariffs on profitability, inflation, and demand, which, combined with recent labor market data, are raising questions.”
