S&P 500 could hit 8,000 in 2026 on more easing from Fed: JPMorgan
Investing.com -- UBS expects global equities to post solid gains over the next two years, setting a year-end 2026 price target of 1,090 for the MSCI All Country World Index, which the firm said implies “+11%.”
In its 2026 Equity Outlook, UBS argued that the backdrop for stocks remains supportive, citing artificial intelligence, productivity prospects and a favorable macro environment.
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Analyst Andrew Garthwaite wrote that “we target 1090 for MSCI AC World end-2026,” highlighting several key drivers.
A central pillar of UBS’s case is AI-driven productivity.
The bank said that “if AI increases productivity from 2028 half as much as TMT was temporarily perceived to have done, then we can easily justify 7000 on the S&P 500,” adding that it believes Gen AI, which it describes as “the steam engine of the mind,” will ultimately “increase productivity more than TMT did back in the late 1990s.”
UBS also argued that the market meets “all 7 preconditions for a bubble that we are not yet in,” and sees a “35% chance of a bubble fully forming,” which would “justify 1090 MSCI AC World.”
Other supports include “the well-behaved nature of US wage growth,” historical equity performance when bear markets are narrowly avoided, and the view that “it is too early to call an end to AI or Tech+ outperformance.”
UBS noted that Tech+ earnings growth is expected to beat the market until at least mid-2027.
Regionally, UBS’s targets imply “very similar returns by end-2026 for Europe, EM and the US,” but upgraded the United States to a “small overweight.”
The firm argued that “US equities are particularly well suited to outperform if we enter the early stages of a bubble,” supported by AI investment, GDP sensitivity to equity gains and faster technology adoption.