Deutsche Bank has set one of the most bullish targets on Wall Street for next year, projecting the S&P 500 to reach 8,000 by the end of 2026. The bank says equity positioning, which snapped back sharply after the April selloff, has since slipped back to underweight—creating room for investors to rebuild exposure and potentially fuel further upside.
The bank argues that while market narratives remain fixated on how many Federal Reserve rate cuts are still to come, equity performance is being driven less by the level of interest rates and more by the volatility of rates. Lower rate volatility, Deutsche Bank says, tends to unlock stronger equity inflows, support higher valuations and stabilise risk appetite across sectors.
With positioning light, rate volatility easing, and the macro backdrop expected to improve, Deutsche Bank sees scope for the S&P 500 to extend its multi-year advance into 2026.
This article was written by Eamonn Sheridan at investinglive.com.