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Pro: S&P 500 target
JPMorgan strategist Dubravko Lakos-Bujas has raised his year-end S&P 500 target to 7,800 from 7,200, implying a 5.9% upside from current levels. In a note to clients, he described a "'Blue Sky' scenario" as the U.S.-Iran conflict moves toward resolution, noting President Donald Trump's confirmation on Wednesday that Iran assured no tolls on the Strait of Hormuz. However, Lakos-Bujas cautioned that the upward path will likely be "non-linear" due to several hurdles. Strong back-to-back earnings seasons have reset the bar higher for the upcoming second-quarter season, making it more difficult for companies to significantly surprise on both earnings and capital expenditure. According to FactSet, S&P 500 profits grew nearly 14% year over year in Q4 2025 and surged 28.9% in Q1 2026, with Q2 earnings expected to expand by 22%. Lakos-Bujas also flagged that rapidly increasing equity supply over the coming quarters, along with potentially tighter monetary policy, could constrain equity multiples. Despite these concerns, he expects AI spending to continue and U.S. businesses and consumers to remain resilient, offsetting headwinds such as tariff uncertainty, supply-chain disruptions, and higher energy prices. He added that buybacks are on pace for another record year. His new target ties for the fourth highest in the CNBC Market Strategist Survey, just above the average of 7,789. The highest targets are 8,100 from both Oppenheimer's John Stoltzfus and Citi's Scott Chronert, while Bank of America's target of 7,100 is the lowest.