CFRA's Sam Stovall Predicts S&P 500 to Hit 7,400 by End of 2026

This analysis is based on the CNBC Squawk Box interview with CFRA Research chief investment strategist Sam Stovall [1]. On December 31, 2025, Stovall predicted the S&P 500 index would end 2026 at approximately 7,400. The S&P 500 closed at 6,896.24 on December 31, 2025 [0], meaning the forecast implies approximately 7.3% growth for the year. This forecast is conservative compared to projections from peers like JPMorgan (8,000) and Evercore ISI (7,750) [1].

The event occurred on New Year’s Eve when U.S. markets were closed, so immediate price reactions are unlikely. Instead, the forecast is expected to be incorporated into market sentiment when trading resumes on January 2, 2026. Stovall noted two key factors in his outlook: headwinds from 2026 being a midterm election year (historically a subpar period for the S&P 500, with an average 3.8% gain compared to 11% in other presidential term years) and tailwinds from a narrowing earnings growth gap between the Mag 7 and the rest of the index [1]. In 2025, the S&P 500 had already gained approximately 17% through December 31 [0].

1. Conservative Forecast Amidst Bullish Peers
   : Stovall’s 7.3% growth projection is notably more cautious than higher targets from JPMorgan and Evercore ISI, indicating a tempered approach to 2026 market expectations.
2. Midterm Election Year Historical Context
   : The emphasis on midterm elections as a headwind underscores potential for muted growth or increased volatility, based on the S&P 500’s historical performance in such years.
3. Broadening Market Participation
   : A narrowing earnings gap between the Mag 7 and the rest of the index could signal a shift towards more balanced market growth, with non-Mag 7 stocks potentially contributing more significantly in 2026.

• Election Year Volatility
  : Historical data shows midterm election years tend to be subpar for the S&P 500, which could lead to increased market volatility or slower growth than Stovall’s forecast [1].
• Conservative Assumption Disappointment
  : If economic conditions or corporate earnings outperform CFRA’s underlying assumptions, the 7,400 target may be perceived as too low, potentially leading to market disappointment if expectations adjust.
• Unforeseen External Risks
  : Geopolitical tensions, supply chain disruptions, or unexpected changes in Fed policy could significantly impact the market beyond Stovall’s forecasted scenario.

• Broader Market Growth
  : A narrowing earnings gap between the Mag 7 and the rest of the index presents an opportunity for more balanced market participation, supporting steady growth even if large-cap tech performs less strongly than in previous years.
• Potential Upside Surprise
  : If economic and corporate performance exceed conservative assumptions, the market could surpass the 7,400 target, aligning more closely with higher projections from peer strategists.

• S&P 500 Closing Price (December 31, 2025)
  : 6,896.24 [0]
• 2025 S&P 500 Performance
  : ~17% through December 31 [0]
• 2026 Forecasted Growth
  : ~7.3% to reach 7,400 [1]
• Peer Forecast Comparison
  : JPMorgan (8,000), Evercore ISI (7,750) [1]
• Key Headwind
  : 2026 midterm election year (historical average 3.8% S&P 500 gain) [1]
• Key Tailwind
  : Narrowing earnings growth gap between Mag 7 and non-Mag 7 stocks [1]