CFRA increases S&P 500 target after index hit all time high

Wall Street’s sentiment appears to be shifting as CFRA Research upgrades its outlook for the S&P 500, pointing to a continued rally through the remainder of 2025 and into 2026.

The firm, led by Chief Investment Strategist Sam Stovall, now projects the S&P 500 to reach 6,850 within 12 months—approximately 9% above where the index stood on Thursday.

The upward revision reflects growing optimism around the U.S. equity market's resilience following a near-19% correction earlier this year.

CFRA also raised its year-end 2025 target to 6,525, implying a 4% gain from current levels over the next six months.

Historical patterns and market resilience

CFRA’s updated forecast is rooted in historical market behavior.

“We are encouraged by the recent recovery from the near-19% correction and the typical post-correction gain averaging 10% since WWII,” the firm wrote in a note to clients.

On Thursday, the S&P 500 hit an all-time high of 6,284.65, rising 26% from the lows in April.

This signals renewed momentum after months of volatility.

The firm also highlighted a seasonality factor.

In early October, the S&P 500 will enter its fourth year in a period that has historically yielded average gains of 13%, following what is often considered a challenging third year.

This cyclical behavior has reinforced CFRA’s confidence in the market’s potential for further gains into 2026.

As recently as April 23, CFRA had forecast a more conservative year-end level of 5,925 for the S&P 500, with a 12-month target of 6,240.

The significant upward revision illustrates how quickly sentiment on Wall Street can shift in response to changing economic and policy conditions.

Softening tariffs, fed policy add to momentum

One of the catalysts for the market’s rebound has been the softening of trade policy rhetoric from President Donald Trump.

The rollback of some of his previously proposed tariffs has eased investor concerns, contributing to the broader recovery in equities.

However, macroeconomic forces remain central to the market outlook.

The interplay between economic growth and Federal Reserve policy is particularly important.

While the CFRA note did not offer a specific prediction for the July Fed meeting, the firm expects the central bank to begin easing monetary policy in the coming year.

“We see the Federal Reserve cutting the fed funds rate four times in the coming year for a total reduction of 1.00%,” the note stated.

This dovish forecast stands in contrast to short-term market expectations, which were tempered by a stronger-than-anticipated June jobs report that reduced the likelihood of a near-term rate cut.

Above-consensus outlook for S&P 500

CFRA’s year-end target of 6,525 is notably above the average projection from other major Wall Street strategists, according to the CNBC Market Strategist Survey.

The bullish stance underscores the firm's view that recent macro developments, historical trends, and improving investor sentiment could collectively sustain the current rally.