Quick overview

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In a landscape of diverging forecasts and growing macroeconomic uncertainty, investors will need to navigate the second half of the year with extreme caution.

As global markets continue to grapple with the aftermath of trade tensions and mounting fiscal pressures in the U.S., major Wall Street banks are revising their S&P 500 forecasts for the second half, with targets ranging between 6,400 and 7,100 points. The general consensus, hovering around 6,697 points, reflects the market’s current duality: a cautious optimism that endures despite persistent turbulence, and a shared prudence about potential setbacks that could derail the rally.

In its latest Wall Street outlook, Barclays raised its S&P 500 price target. “We are increasing our 2025 S&P 500 target to 6,050, anticipating a recovery in earnings growth by fiscal year 2026,” said the British financial group.

According to the report, Barclays believes “the peak uncertainty surrounding trade policy is likely behind us,” and now expects a “modest re-rating” in valuations, as companies absorb the impact of tariffs on their earnings per share (EPS). It adds: “Looking ahead to 2026, we expect earnings growth to normalize following the tariff shock in 2025. We maintain our overweight recommendation on the Financials, Healthcare, and Big Tech sectors.”

Diverging Views on Wall Street

With this revision, Barclays lifts its 2025 S&P 500 target from 5,900 to 6,050. However, the bank notes that EPS has not yet fully felt the burden of tariffs and that interest rates “remain elevated amid concerns over the U.S. fiscal outlook.” It also warns that a potential pullback in consumer spending remains a key risk, keeping “valuation assumptions in check and our 2025 EPS estimate unchanged at $262.”

This cautious optimism is also reflected in strong capital flows from retail investors, which have helped fuel an unusually robust market. Over the past week alone, individual investors bought a net $2.3 billion in U.S. equities—extending a bullish streak to 25 of the past 26 weeks, “the longest in history,” according to Bank of America (BofA).

This trend, which has pushed the four-week moving average of retail flows to more than twice the highs seen in 2017 and 2022, “underscores retail investors’ confidence in equities, but also raises questions about the sustainability of such inflows if a deeper correction unfolds,” BofA cautioned.

However, the warning this time comes from across the Atlantic. European banking giant Société Générale released a sobering report on U.S. equities, laying out in detail “why it’s time to take a long-term view” and why “investors should be cautious about overreliance on the U.S. as the sole equity investment option.”

Wall Street Forecasts: From Most Bullish to Most Cautious

It’s worth noting that Barclays’ outlook is not the most optimistic among Wall Street firms. Among the banks that have updated their S&P 500 targets recently:

• Wells Fargo: 7,007 points
• Deutsche Bank: 7,000 points
• Oppenheimer: 7,100 points
• Bank of America: 6,666 points
• Goldman Sachs: 6,500 points
• Morgan Stanley: 6,500 points
• J.P. Morgan: 6,500 points
• Barclays: 6,600 points
• UBS: 6,400 points