Wells Fargo Securities’ Christopher Harvey is holding firm on his ultra-bullish year-end target for the S&P 500 Index at 7,007, implying an 11% gain from Friday’s close of 6,296.79.
The equity gauge has already climbed 27% since its April low, a move Harvey attributes primarily to the unrelenting strength of America’s largest technology companies.
“What we’re seeing is the winners continue to win,” Harvey told Bloomberg Surveillance. “The uber-cap companies have the higher margins, are gaining more market share. There is a real secular trend in AI that will continue.”
Despite market volatility earlier in the year and ongoing policy risks, Harvey believes the momentum in tech, particularly in companies leading AI innovation, is sustainable.
He points to the performance of the so-called “Magnificent Seven” tech giants, which have risen 42% since April 9, when President Trump paused a number of tariffs.
Just five stocks, Nvidia, Microsoft, Apple, Amazon, and Meta, now account for more than a quarter of the index’s performance.
Fundamental difference of S&P 500 today
While some skeptics warn of stretched valuations, Harvey counters that today’s index composition provides resilience.
“The S&P is not the same as it was 25 years ago,” he said, noting that the benchmark is now much stronger, with better fundamentals and more tech-focused, high-productivity companies.
Harvey emphasized that the index’s increasing concentration in a few dominant firms insulates it from broader macroeconomic weaknesses.
“It is much stronger, the fundamentals are much better today than they were back then,” he said.
Moreover, he credited improved corporate management and strategic focus as further reasons for optimism.
Earnings season could reinforce the bullish outlook.
The Magnificent Seven are forecast to post a combined 14% rise in Q2 profits, while earnings across the remainder of the S&P 500 are expected to stay relatively flat, according to Bloomberg Intelligence.
Tesla and Alphabet, the two laggards in the group, are set to report this week, giving investors a fresh glimpse into Big Tech’s durability.
Macro tailwinds could extend rally
Harvey’s consistent bullish stance throughout April’s volatility stood in contrast to many peers who trimmed their forecasts amid trade and policy uncertainty.
His view is shaped by past experience with Trump-era policy cycles. “We had seen Trump 1.0,” Harvey said. “We know his style — it’s to go out to the nth degree and then to come back in.”
Looking ahead, Harvey anticipates continued tailwinds for equities heading into 2025.
He cites expectations for easing monetary policy, resilient consumer demand, and a pickup in M&A activity as supportive forces.
“We do think the Fed is going to cut, fundamentals are fine, the consumer is okay,” he said.
Even as risks remain, including Trump’s trade policies and tensions with the Federal Reserve, Harvey believes the positives continue to outweigh the negatives.
The S&P 500, already hitting multiple record highs since late June, reflects growing investor confidence in this outlook.
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