Major bank unveils S&P 500 target for 2026

Core Viewpoint - Deutsche Bank predicts the S&P 500 will reach 8,000 by the end of 2026, representing an increase of nearly 18% from current levels [1][2] Group 1: Earnings and Market Dynamics - The forecast is based on expectations of earnings expansion and growth beyond the major tech companies that have dominated recent stock market gains [2][6] - Deutsche Bank models earnings per share for the S&P 500 at $320, indicating mid-teens earnings growth driven by a broader range of index constituents [4] - The bank believes that fears of an AI bubble are overblown as long as corporate earnings align with stock prices [5] Group 2: Valuation and Economic Conditions - Valuations may remain stable or even expand due to strong demand, healthy margins, and robust balance sheets, despite being perceived as "extremely high" [6] - The macroeconomic environment is supportive, characterized by rapid AI investment, steady global expansion, and a re-acceleration of the U.S. economy as trade uncertainties diminish [7]