RBC Capital Markets on Sunday raised its year-end target for the S&P 500 index to 6,250, up from 5,730, marking its second upgrade in 2025. The revision comes amid improving investor sentiment and rising confidence in the U.S. economy’s trajectory heading into 2026.
Despite recent volatility following President Donald Trump’s new 50% tariffs on Brazil and renewed trade tensions with the EU, the S&P 500 remains up 6.4% year-to-date, easing only slightly from its record high last Friday.
RBC analysts noted their models now reflect how equities behave ahead of moderate GDP expansions—defined as between 1.1% and 2% growth. This forward-looking optimism echoes the stance of other major Wall Street firms like BofA Global Research and Goldman Sachs, both of whom also raised their targets earlier this month.
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RBC’s 2025 EPS forecast for the S&P 500 remains unchanged at $258, slightly below the consensus. Analysts cautioned it’s still too early to rule out the earnings impact of rising tariffs, especially with Q2 reports just beginning to surface.
According to RBC, sentiment has improved faster than anticipated, with markets now more willing to price in longer-term earnings stability and moderate policy outcomes, rather than short-term disruptions.
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While optimism around 2026 is gaining traction, the market still faces short-term risks from:
Escalating tariff pressures on key trading partners
Potential consumer price index (CPI) spikes
Corporate guidance amid uncertain macro headwinds
Nonetheless, RBC’s target lift signals growing confidence that U.S. equities can weather near-term turbulence, especially if GDP growth holds within a stable range and earnings maintain resilience.
