RBC Lifts S&P 500 Year-End Target to 6,250 on Optimism for 2026 Growth
Summary
RBC Capital Markets has raised its S&P 500 year-end target to 6,250, citing improved investor sentiment and optimism for 2026 economic growth. Despite recent tariff-related volatility, the S&P 500 is up 6.4% year-to-date. The upgrade reflects expectations of moderate GDP expansion and long-term earnings stability, though analysts caution about potential tariff impacts and other short-term risks.
RBC Lifts S&P 500 Year-End Target to 6,250 Amid Optimism for 2026 Growth
Related Stock: SPY
Publication Date: July 14, 2025
RBC Capital Markets has significantly raised its year-end target for the S&P 500 index to 6,250, up from 5,730. This marks the firm's second upgrade in 2025, driven by improving investor sentiment and growing confidence in the U.S. economy's trajectory heading into 2026.
Despite recent market volatility stemming from President Donald Trump's new 50% tariffs on Brazil and renewed trade tensions with the EU, the S&P 500 has demonstrated resilience, remaining up 6.4% year-to-date and easing only slightly from its record high achieved last Friday.
Why the Upgrade?
RBC analysts indicated that their updated models now account for how equities typically perform ahead of moderate GDP expansions, specifically growth rates between 1.1% and 2%. This forward-looking optimism aligns with the views of other prominent Wall Street firms, including BofA Global Research and Goldman Sachs, both of which also revised their targets upward earlier this month.
RBC's 2025 Earnings Per Share (EPS) forecast for the S&P 500 remains unchanged at $258, which is slightly below the market consensus. Analysts cautioned that it is still premature to fully discount the potential earnings impact of rising tariffs, especially as Q2 corporate reports are just beginning to emerge.
Investor Sentiment Rebounding
According to RBC, investor sentiment has improved more rapidly than anticipated. Markets are now showing a greater willingness to price in longer-term earnings stability and moderate policy outcomes, rather than being overly swayed by short-term disruptions.
What to Watch Ahead
While optimism surrounding 2026 is gaining momentum, the market continues to face several short-term risks:
- Escalating tariff pressures on key trading partners
- Potential spikes in the Consumer Price Index (CPI)
- Corporate guidance amidst uncertain macroeconomic headwinds
Nevertheless, RBC's decision to raise its target signals increasing confidence that U.S. equities can navigate near-term turbulence. This confidence is particularly strong if GDP growth remains within a stable range and corporate earnings demonstrate continued resilience.