To The Moon

We are just days into July 2026 and Q2 2026 earnings season is just about to kickstart again.

While we await for $Pepsi(PEP)$ to get the ball rolling on Thu, 09 Jul 2026, I think it is timely to tap into Wall Street’s veterans and find out where they think about S&P 500 index from now until end of 2026.

Tom Lee, Savita Subramanian, and the broader Wall Street - bullish views are geared towards the same S&P 500 setup, but they are (clearly) not looking through the same lens.

Tom Lee’s Bifurcated Outlook

First off, we have Fundstrat, Managing Partner, Tom Lee.

Lee’s message is the most nuanced because it combines (a) near-term caution with (b) longer-term confidence.

In Mon, 6 Jul 2026 interview with CNBC, he sees (a) an immediate bounce, followed by (b) a sharp Autumn correction before (c) a year-end rally.

He is optimistic about July 2026 because both the S&P 500 and Nasdaq Composite have declined by -1% and -3% respectively.

He therefore anticipates that underperforming fund managers would buy the dip, driving price-to-earnings (PE) expansion on the back of upside surprises in second-quarter earnings.

The H2 2026’s “speed bump” in US equity markets should take place between August & October, due to 4 possible triggers.

They are namely:

• Policy direction US Fed adopts under Fed chair, Kevin Warsh’s leadership.

• Gradual unlocking of $SpaceX(SPCX)$ lock-in period during H2 2026.

• Cumulative shortage of petroleum products.

• High margin debt.

Long story short, he is not forecasting a collapse in the index.

Instead, he is warning that multiple pressure points could converge into a bear-market-like phase.

The distinction matters because Lee is still constructive on the full-year outcome:

• Based on a conservative PE multiple of 20 applied to FY 2027, S&P 500 could top 8,000 points.

• If the PE is 22 or better, the S&P 500 could be anywhere between 8,400 to even 8,800.

Incidentally, Lee’s long-term target aligns with $Morgan Stanley(MS)$, CIO, Michael Wilson & team, who projected the S&P 500 at 8,000 points.

This represents a +7.0% upside from current levels, following a YTD surge of over +9.0%.

BAC’s Cautionary Stance

$Bank of America(BAC)$, Head of US Equity & Quantitative Strategy & ESG Research, Savita Subramanian’s take on the S&P 500 is more structurally defensive.

In a 29 Jun 2026 interview with Barron, BAC’s target is about 7,100 with a neutral to negative stance on equities at the index level because of a bearish call on Mega cap tech cohort, specifically the Magnificent Seven. (see below)

S&P 500 as of 07 July 2026

Her concern is not simply that tech has run hard; rather it because market has become too dependent on AI spending, especially from hyperscalers that are capex spenders rather than the recipients of the spending.

Her caution is rooted in several systemic vulnerabilities:

While she prefers semiconductors as a clear beneficiary of AI capex, she is concerned that the massive tech build-out mimics the telecom bubble - costly, slow, & potentially deflationary.

Financially, 1980s-level growth expectations and extreme multiples for past sales signal speculation and FOMO rather than fundamentals.

On a financial level, investors are :

• Expecting companies to grow as fast as they did back in the 1980s.

• Paying extremely high prices just based on past sales.

This combination shows that the market is currently driven by hype and the fear of missing out (FOMO), rather than real economic facts or the actual value of the companies.

Crucially, Subramanian fears centred on AI's broader economic fallout.

With 70% of US economy - consumer-driven, a hiring pause for white-collar professional services, (US’s primary engine of economic value for 30 years) threatens consumption.

This risk coincides with middle-income consumers already trading down under the pressure of rising costs for insurance and high-income rentals.

Beyond tech, non-asset-light sectors (eg. manufacturing, energy, and materials) are seeing disciplined, deglobalization-driven earnings acceleration.

However, with the government ‘steer’ a return to a manufacturing-heavy economy, that may depress overall S&P multiples.

Combined with rising equity supply from new IPOs, index rule shifts, and the threat of unmoored interest rates due to the US deficit, Subramanian rejects cash-burning growth.

Instead, she recommends allocating capital to cash-generating large-cap value, energy, and financial stocks that offer dividend yield, margin stability, and balance sheet strength.

Broad Wall Street Optimism

Meanwhile, multiple Wall Street figures see continued momentum sustained by earnings and liquidity.

Financial analysts tracked by FactSet predicted a +21% gain for the S&P 500 over the next 12 months, while $JPMorgan Chase(JPM)$ analysts revised their year-end S&P 500 forecast upwards to 7,800.

The sustained growth hinges heavily on the technology sector, where the upcoming July earnings season must validate the monetization of artificial intelligence.

While the artificial intelligence boom propelled the semiconductor index $Philadelphia Semiconductor Index(SOX)$ to a record-breaking quarter (see below), Baird investment, Strategist, Ross Mayfield advise against chasing parabolic stock charts in memory and chipmakers.

SOX's 2026 YTD - as of 07 July 2026

Furthermore, investor scrutiny is rising over the massive infrastructure spending by Big Tech hyperscalers, causing the Magnificent Seven to lag behind semiconductor performance.

Last but not least Schwab Asset Management, CEO, Omar Aguilar stated:

• The market is only in the middle section of the innings of the AI trade, implying that there is still more AI capex and spending to go before AI will actually borne fruits.

• Perhaps it is time to consider a reduction in megacap exposure in favor of diversification into Industrials, Healthcare, Materials, Small-to-Mid-cap companies, and International equities.

One S&P 500 - 3 Different Views. How ?

When experts look at the exact same data and completely disagree, it proves the stock market isn't a simple math problem.

Instead, it is driven by human psychology (eg. Fomo, panic, bias & herd mentality), meaning that what feels true today can easily change tomorrow.

My viewpoints: (mine only)

If comparison is mandatory, the three differing views still show a market that is still rising, but under the surface, the leadership (sector, industry and even company stock) debate is getting sharper:

• Fundstrat’s Lee thinks the next real risk will be in August to October.

• BAC’s Subramanian feels market is already too expensive and too dependent on the wrong kind of growth.

• The broad Wall Steet post says the rally still has enough earnings and liquidity support to continue.

Despite opposing views, all acknowledge that US market’s next move will likely depend less on broad optimism.

Instead, it will be about “showing investors the money” - whether the AI trade, earnings season, and liquidity conditions keep confirming the story that investors are paying up for today.

I daresay Magnificent 7 and AI-labelled stocks’ fate will depend on their Q2 2026 earnings report card to show some evidence of monetization. Agree ?

Personally, I think it’s almost a must to insert the “Middle-East peace” variable into the equation; without which whatever optimistic forecasts or earnings will be spirit-dampening.

Latest US attack on Iran just threw a spanner in the works for the S&P 500’s rosy H2 2026 outlook, instantly shattering the energy price tailwind and dampening US market sentiments instantly. (see above)

Needless to say, it will be bloody Wednesday when trading resumes.. Agree ?

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

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