The S&P 500 closed at 7,473.47 on May 22, rising 27.75 points, or 0.37%, as Wall Street continued pushing toward fresh record territory. Nasdaq futures are sitting just four points away from a new all-time high, while S&P 500 futures trade only eight points below historic levels. However, the U.S. stock market is closed today, May 25, 2026, in observance of the Memorial Day holiday, and is set to open on Tuesday, May 26, 2026.
The rally comes as investors respond positively to signs of a potential U.S.-Iran peace agreement and growing optimism surrounding artificial intelligence-driven earnings growth.
Can the market continue climbing after such a massive run? Several major Wall Street firms now believe it can.
UBS Raises S&P 500 Forecast Again
UBS Global Wealth Management lifted its year-end 2026 target for the S&P 500 to 7,900 from 7,500. The firm also introduced a June 2027 forecast of 8,200.
Strategists pointed to resilient consumer spending, continued AI infrastructure investment, and a supportive Federal Reserve as the key drivers behind the stronger outlook.
UBS also raised its 2026 earnings-per-share estimate for the index to $335 from $310. According to the firm, semiconductor demand and rising memory chip pricing account for nearly half of the profit increase. Energy sector gains tied to higher oil prices and expanding data center spending also contributed to the upgrade.
The firm maintained its “attractive” view on U.S. equities despite growing concerns about inflation pressures tied to Middle East tensions.
At the same time, first-quarter S&P 500 earnings remain on track to rise nearly 29% year over year, according to LSEG data. Much of that growth comes from large-cap technology companies benefiting from the global AI spending surge.
JPMorgan Sees Path Toward 9,000
JPMorgan Private Bank presented an even more aggressive scenario for the benchmark index. The bank said the S&P 500 could potentially climb above 9,000 by mid-2027, representing roughly 22% upside from current levels.
The bank stressed that this does not represent its base-case forecast. However, strategists argued that AI productivity gains could drive stronger corporate earnings growth without creating excessive inflation.
Why does that matter? Investors increasingly worry that inflation could eventually slow the AI-fueled rally. JPMorgan believes higher productivity may offset part of that risk.
The bank compared the current environment to the late 1990s technology boom, when productivity growth accelerated, and the S&P 500 delivered five consecutive years of gains exceeding 20%.
Technology stocks continue to lead the market higher this year. The tech sector within the S&P 500 has already gained 23% year to date, sharply outperforming the broader index’s roughly 8% advance.
Oil Prices And Iran Risks Remain Key
Despite the bullish momentum, risks continue building beneath the surface.
Wall Street remains highly sensitive to developments involving Iran and the Strait of Hormuz. Analysts warn that prolonged conflict or supply disruptions could push oil prices significantly higher, fueling inflation across the broader economy.
Higher energy prices often increase transportation and manufacturing costs, which can eventually pressure consumers and corporate profit margins.
UBS acknowledged that unresolved tensions in the region could weaken several bullish market drivers if oil prices and interest rates continue climbing.
S&P 500 Technical Levels In Focus
From a technical perspective, the S&P 500 continues trading inside a long-term ascending channel and now sits near a key resistance trendline.
Bulls need a decisive breakout above resistance to confirm another leg higher. Otherwise, traders could see a short-term correction after the recent rally.
Source: Success Titans via X
The index recently touched an all-time intraday high of 7,517.12 on May 14 and remains close to those levels heading into the new trading week.
For now, momentum clearly favors the bulls. Still, investors continue watching inflation, oil prices, and AI earnings growth closely as the market approaches another critical breakout zone.
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