Wells Fargo's Bullish Forecast for S&P 500 Amid Easing Risks

Wells Fargo increased its 2026 S&P 500 target to 7,950, citing stronger earnings and easing risks post the U.S.-Iran deal. The firm expects 2026 EPS of $340 and 2027 EPS of $390, noting eased geopolitical tensions. Inflation remains a concern, though stocks are seen as a hedge.

Wells Fargo has raised its year-end 2026 target for the S&P 500 to 7,950, driven by stronger corporate earnings and a reduction in macroeconomic risks following the U.S.-Iran interim deal. A recent market pullback has also reset investor sentiment, signaling potential gains.

The new target suggests a 5.2% upside from Monday's close. As of June 15, Wells Fargo forecasts S&P 500 earnings per share to rise to $340 in 2026, up from a previous $315 estimate, citing robust profit momentum and strong corporate fundamentals.

Wells Fargo also increased its 2027 EPS target to $390 from $365. The easing of geopolitical tensions after the Iran agreement has reduced macro uncertainty, previously affecting markets. While inflation poses risks, the brokerage views stocks as an inflation hedge. The S&P 500 has risen 10.3% this year, mainly due to AI advances and the Iran conflict resolution. Recent sell-offs have neutralized investor sentiment, creating opportunities for gains, particularly in cyclical sectors and semiconductors, according to Wells Fargo.