The latest leg of the stock market rally has prompted a major upgrade to Wall Street’s most bullish forecast. Oppenheimer’s chief market strategist, John Stoltzfus, raised his 2025 year-end S&P 500 (^GSPC) target to 7,100 from 5,950, citing improving trade conditions. His revised projection, shared in a Sunday night client note, now leads all forecasts on the Street.
“Progress on trade negotiations removes an uncertainty that had weighed on our market outlook,” Stoltzfus wrote, predicting an 11% advance in the benchmark index through the remainder of the year. If the S&P 500 closes 2025 above that level, it would mark a third consecutive year of gains over 20%.
Stoltzfus is among several strategists who have reinstated their earlier forecasts after pulling back during the steep market sell-off in April, which saw stocks drop nearly 20% amid tariff worries.
His latest upgrade came shortly after President Trump announced a trade agreement with the European Union that imposes a baseline 15% tariff on EU imports.
“We believe that enough ‘tariff hurdles’ have been overcome for now to reinstate our original price target for the S&P 500 of 7100 by year-end,” Stoltzfus added.
To arrive at his forecast, Stoltzfus is modeling $275 in S&P 500 earnings per share for 2025 and applying a 25.8 forward price-to-earnings ratio. That’s well above the current 22.4 valuation, which itself exceeds the five- and ten-year averages of 19.9 and 18.4, respectively, per FactSet. That elevated valuation has raised concerns for some market watchers about a potentially overheated rally.
However, bulls argue corporate earnings are holding up better than expected. Following the tariff shock in April, results so far have exceeded expectations. With about one-third of S&P 500 companies having reported, Q2 earnings growth is tracking at 6.4%, up from 5% as of late June, according to FactSet.
Outlooks for the back half of 2025 and full-year 2026 have also been trending higher. FactSet data as of July 25 shows analysts expect S&P 500 earnings to grow 13.9% next year, a slight increase from the 13.8% projected a month earlier.
Further optimism came from Citi’s head of U.S. equity strategy, Stuart Kaiser, who said in a Sunday note that “41% of companies have raised their full-year guidance, up from 10% seen in April.” He emphasized this was an added “tailwind” for stocks.
Morgan Stanley’s chief investment officer Mike Wilson echoed the bullish tone. Citing a strong rebound in corporate earnings revisions, he told Yahoo Finance: “We are currently experiencing one of the strongest V-shaped recoveries in history, rivaling the Covid rebound in 2020, the last time we were so out of consensus on the market.” He added, “Many market participants do not appreciate how strong this very fundamental driver has been over the past several months, which helps to not only justify the rally to date, but also why we remain bullish on the next 6-12 months.”
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