S&P 500 to 7,500 in 2026? How Tech Stocks Could Drive 20% Gains (Or Not)

Market targets don’t materialize out of thin air. They bubble up from shifts in sentiment, changes in macro conditions, evolving earnings expectations, and the realization that previous assumptions, either bullish or bearish, were wrong.

So why has 7,500 become such an important anchor point?

1. Because the Market Has Already Done More Than Anyone Expected

At the start of 2025, forecasts, like those from Morgan Stanley and Edward Jones, predicted a more muted return year after the impressive numbers seen in 2023 and 2024. In fact, many strategists warned the 2023–2024 tech rally was overextended. And yet, the S&P 500 kept rising steadily, supported by stronger earnings, a slow but persistent decline in inflation, and a softening Federal Reserve tone.

By late 2025, as the index approached 6,900, the conversation shifted from “Can the market recover?” to “How much further can this go?”

A move from 6,850 to 7,500 requires only about a 10% gain, well within historical norms. In fact, since 1950, the S&P 500 has posted a 10% or greater annual return in more than half of the years going back to 1928. 

2. The AI Productivity Story Has Moved From Theory to Evidence

This may be the single biggest shift. For years, investors have been waiting for the next major productivity boom, a catalyst with the power to boost output while containing costs. AI appears to be that catalyst.

Companies are now discussing topics like automated coding, automated customer support, AI-enhanced analytics, leaner marketing and sales operations, supply chain optimization, and streamlined administrative functions.

AI is doing what technology historically does: compressing costs and expanding output. If these trends accelerate, earnings may surprise to the upside.

3. The Federal Reserve Is on the Market’s Side (For Now)

There is no doubt about it: interest rates can move markets. When rates rise, valuations typically compress. When rates fall, valuations often expand. And the Fed is currently in the early stages of an easing cycle designed to:

Lower borrowing costs and a favorable discount-rate environment could give equities just enough lift to hit new highs.