With the S&P 500 rewinding to the pre-crisis price levels and having been removed by 8% from the recent bottom of 6.343 units, optimism has returned to the investment community again. The movements of the last few days on Wall Street, give themselves the answer to the dominant question. Are we facing the beginning of a new upward cycle or is the current recovery just a rest before a new fall?
Thus we find that investors appreciate that they have left behind the concerns of geopolitical tensions in the Middle East and the naval blockade in the Straits of Hormuz, which threaten at all times to overthrow the positive climate. Focusing more on combining the resilience of the American economy, upward corporate profitability and investor psychology against artificial intelligence (AI), which apparently is not affected by the war in Iran.
First of all, 33% of the value of the S&P 500 index is based on the progress of technological shares such as Nvidia, Apple, Microsoft, Amazon, Alphabet (Google), Broadcom, Meta Platforms (Facebook) and Tesla, which remain intact from the core of the crisis. As technological developments are a one-way street, they are not affected by crises and are not vulnerable to the risks at stake. A very reassuring event for investors and promises to raise the prices of these shares
In addition, three extremely interesting analyses of RBC Capital Markets, HSBC and Wolfe Research were also published, which also send an optimistic message.
RBC Capital Markets is a subsidiary of the highly conservative Royal Bank of Canada bank. So her view has its own special gravity, especially in the midst of the generalized climate of uncertainty and concern. In its analysis, it is noted that the retreat of the S&P 500, after the start of the war at 6.343 units, remained within the tolerated framework of a classic pullback of less than 10% of the high in January, without touching the limits of market baptism in a bear market. To remind you that in April 2025 the White House's announcement of the imposition of duties had sent S&P 500 to -20%.
According to RBC, fears of a recession are at low levels, corporate profit expectations for 2026 remain strong and the general sense of Wall Street that the war will end soon lead to the assessment that «markets have seen their low» for 2026.
The target price for S&P 500 remains unchanged on the RBC Capital Markets side at 7,750 units, corresponding to an increase of around +11% from yesterday's closure. RBC recommends for purchase the development shares of high capitalization, the so-called «large cap growth», against shares «value» generally preferred in times of uncertainty.
Wolfe Research states unequivocally that the low of 6.343 units for 2026 has already been noted for S&P 500 and that investors have left it behind for good. Wolfe Research is a big fan of tactics «buy the dip», and urges its customers to buy shares always in Wall Street sinks. In other words, to exploit the declines in shares triggered by geopolitical developments. From developments that do not affect and do not alter the fundamental economic data of technological companies.
For Wolfe Research, «stone» the short-term market path is the period of notification of the results of Q1 (first quarter). With the rise of the S&P 500, it increasingly depends on the fields of technology, semiconductors and the ecosystem of artificial intelligence, any disappointment from the «colossus» the industry could shake market confidence and ask questions about the high expectations that have overwhelmed the market.
The target value for S&P 500 is for the baseline scenario at 7,000 units, with the positive scenario reaching 7,500 points. With the rise based on the returns of shares from the technology, financial services - which already announce very positive results -, communication and consumer products.
HSBC approaches the war in Iran and the wider geopolitical crisis in the Middle East in a completely different way. The bank argues that the market does not need a complete solution to the tensions to recover and that a single threshold is sufficient «marginal» improvement. It notes that even a «less bad» newsflow, it may be «pretty good» for the markets.
In the positives HSBC places the fact that pessimism and doubts about artificial intelligence (AI) in the last two quarters, has led to its disappearance «premium» the valuations of American technology, making the shares re-enticing at current levels. The period of Q1's profit announcement begins with strong expectations, with analysts predicting an EPS (win per share) increase from 13% to 19% on an annual basis, with technology leading the increase by +23%, with the remaining branches at +5%. Jefferies is even more optimistic and in its respective report, estimates that the profitability of small and medium-sized enterprises, «small & mid-cap stock» S&P500 will increase by +11.5%. However, if the analysts' estimates of Q1 and the increased investor expectations are refuted, then the reaction will be directly declining.
HSBC's target price for S&P 500 is at 7,500 units. The assessment is based on historical experience showing that whenever markets «digest» with relative ease the geopolitical shocks, return at speed to an upward trajectory, especially when supported by strong fundamental economic sizes
