Insights 
VT 
Key Points
- Barclays raises S&P 500 year-end target to 6,050, forecasting a 1.32% upside from current levels.
- S&P 500 gained 6.2% in May — its strongest monthly performance since November 2023.
The S&P 500 showed resilience in Wednesday’s session, consolidating just below its recent high at 5,988.5, as investors processed a wave of upgraded outlooks from Wall Street strategists. Barclays became the latest institution to raise its year-end forecast for the benchmark index, citing fading trade risks and a return to earnings normalisation by 2026.
Barclays’ revised year-end target of 6,050, up from 5,900, adds to a growing consensus shift on Wall Street. Goldman Sachs, UBS, Deutsche Bank, and RBC Capital have all raised their forecasts in recent weeks, reflecting stronger-than-expected Q1 earnings and optimism that tariff headwinds will ease into 2025.
Strategists led by Venu Krishna at Barclays project earnings per share (EPS) of $262 for 2025, unchanged from previous estimates, and introduced a 2026 EPS forecast of $285 with a target of 6,700 on the index — a near 12% upside from current levels.
The rationale is that tariff disruptions will be “absorbed throughout the remaining quarters of FY25,” paving the way for a return to pre-tariff growth dynamics in 2026. While secondary effects on inflation and corporate margins remain a risk, Barclays sees little direct tariff drag by next year.
This bullish outlook comes on the heels of a red-hot May, where the S&P 500 surged 6.2%—marking its strongest monthly performance since November 2023. The rally was fuelled by a combination of factors: President Trump’s softened rhetoric on new tariffs helped ease market tension, while resilient corporate earnings—particularly from AI-linked and cyclical sectors—reaffirmed investor confidence. Meanwhile, a batch of cooler inflation data reset expectations around potential Federal Reserve rate cuts, providing an additional boost to risk sentiment.
Technical Analysis
The SP500 index is showing signs of short-term consolidation after reaching a local high of 5988.5. The price action recovered sharply from the previous low of 5867.75 on 3 June, driven by strong upward momentum during the second half of the session. The moving averages (5, 10, 30) currently support a bullish alignment, with the shorter EMAs above the longer-term MA, although flattening out in the final hours, indicating a pause in upward momentum.
Picture: SP500 hovers near 5988 peak after sharp rebound from 5867; bullish trend softens into consolidation, as seen on the VT Markets app
The MACD histogram is beginning to narrow after a strong bullish wave, with the MACD and signal lines converging, which suggests a potential slowdown in buying pressure. While the trend remains technically upward (indicated by the 0.02% positive trend bias), the price has entered a tight range near 5978, showing indecision around resistance levels. A clear breakout above 5988.5 could signal renewed upside, whereas a breakdown below 5960 may invite corrective pressure.
Cautious Outlook
While the broader setup remains bullish, traders should be aware of elevated positioning risk near all-time highs. Macro sensitivity to incoming data, particularly around wage inflation and consumer strength, could inject volatility in the short term. Any upside surprises in the next set of CPI or PCE figures may rekindle speculation of delayed Fed cuts.
That said, as long as support at 5,940 holds, the path of least resistance remains to the upside — with Barclays’ 6,050 target now in focus for summer positioning.
