HSBC sees S&P 500 hitting 7,500 by end of 2026 with 'more to come' in the AI trade

Group 1 - Wall Street anticipates continued investment in AI, with HSBC projecting the S&P 500 to reach 7,500 by December 2026, indicating confidence in the AI-driven market rally [2][3] - HSBC's forecast suggests a potential 12% gain from current levels, reminiscent of the late 1990s tech boom, driven by an ongoing AI investment boom [3] - The firm recommends broadening the AI trade, suggesting that market rallies can persist despite concerns about a potential AI bubble [3] Group 2 - HSBC expects 2026 to be characterized by a "two-speed economy," highlighting disparities in consumer spending and confidence levels [6][10] - High earners and those with better credit scores are more optimistic and spending more, while low-income earners are more cautious and spending less [7][10] - The current earnings season supports the notion of a K-shaped economy, with premium-focused companies like Delta and Walmart performing well amid consumer pressure [9][10]