U.S. equities could extend their rally over the next year as bullish sentiment and investor positioning continue to support the market’s upward trend. Evercore ISI strategist Julian Emanuel says the S&P 500 can reach 9,000 in the next 12 months, implying about 16% upside from Friday’s close of 7,785.76.
Highlights
- Evercore ISI's Julian Emanuel forecasts the S&P 500 reaching 9,000 within 12 months, well above RBC Capital’s 2026 forecast of 8,150.
- Emanuel notes that recession risks, sharply rising long-end yields, and profound FOMO typical of bull market peaks are currently absent.
- Increased diversification is evident as the number of Negative Beta stocks reached a record 121, with names like McDonald’s, PepsiCo, and Kinder Morgan listed.
Evercore ISI outlines path to higher index levels
As reported by CNBC, Emanuel writes in a client note on Sunday that the long-term stock market trend continues to move higher, with room for a Fear of Missing Out driven overshoot. He says the usual conditions that end a bull market, including recession, sharply rising long-end yields, and profound investor or capital-markets FOMO, are not evident.Emanuel’s base-case outlook for the market stands at 7,750, roughly in line with where the S&P 500 stands now. His more bullish 9,000 target sits well above RBC Capital’s 2026 forecast of 8,150, which the report says is the highest target included in CNBC’s Market Strategist survey.
Diversification and AI theme support the outlook
Emanuel also argues that the current market differs from the period before the dotcom bubble burst because investors are more diversified. He says the number of stocks on his Negative Beta list, those moving inversely to the S&P 500 over the past six months, has climbed to a record 121.Names on that list include McDonald’s, PepsiCo, Kinder Morgan, CoStar Group and Gartner. Emanuel says investors have applied lessons from Y2K by seeking diversification even as indexes hit new highs, and he adds that the 2020s AI bull market has yet to match the scale or duration of the innovation-led rallies of the 1990s and 1920s while overall corporate leverage remains subdued.
In our earlier article on the VIX hitting its lowest level of 2026, we discussed how unusually calm volatility readings were flashing potential complacency as U.S. stocks moved into a historically choppier late-summer window. We also highlighted that, despite record highs and strong inflows, strategists were still flagging geopolitical and rate-related risks that could bring volatility back into the market.
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