Wall Street strategist Julian Emanuel is bullish on the S&P 500, raising his 2025 year-end price target to 6,250 and predicting a 20% climb to 7,750 by the end of 2026 due to a technological shift to artificial intelligence. He envisions a potential rise to 9,000 with an ‘AI-driven asset bubble.’

Emanuel sees AI adoption boosting earnings and valuations, comparing the current rally to the 1990s internet boom but noting a quicker AI adoption this time. He raised earnings forecasts for 2025 and 2026 due to AI’s productivity lift and resilience to tariffs.

Citi keeps its 6,600 year-end S&P 500 forecast and $272 full-year earnings outlook intact, citing policy support and resilient consumer spending as tailwinds. The market faces volatility heading into year-end, with Q3 earnings expected to be “noisy” following strong Q2 beats.

A federal court struck down most of Trump’s global import tariffs, leaving them in place as the administration appeals. Citi’s playbook remains unchanged, but removing tariffs could reignite fiscal concerns. Long-term Treasury yields edged higher, nearing a threshold viewed as a headwind for stocks.

Markets anticipate a Fed rate cut in September after Chair Powell opened the door to reduction. Friday’s August jobs report will test expectations, with data strengthening the case for easing. Markets price in a 90% chance of a 25 basis point cut, but more data could support deeper easing.

Read more at Yahoo Finance: AI revolution could lift S&P 500 to 7,750 next year, strategist says