Oct 5 (Reuters) - Stifel raised its year-end target for the S&P 500 .SPX benchmark index to 7,900 from 7,800, citing expectations of stronger earnings and gains from AI spending despite worsening macroeconomic conditions.
Here are some details:
Brokerage said in a note dated Sunday that resilient government spending and AI investment are driving earnings growth
But strong economic activity is also keeping interest rates higher for longer, it said
The revised target is 1.9% higher than the index's current levels
US stocks have held firm despite higher energy costs, persistent inflation, elevated bond yields and cooling enthusiasm around AI
Brokerage said sticky inflation is again driving markets, with strong economic data weighing on stocks while bonds offer less protection
"Tech capex and operating leverage still power S&P 500 margin expansion," it said
Stifel's forecast is slightly lower than the consensus among brokerages, many of which expect the S&P 500 to end 2026 at or above 8,000 and the bull market to extend into next year
(Reporting by Kanishka Ajmera in Bengaluru; Editing by Sahal Muhammed)