RBC lifts S&P 500 year-end price target to 6,250

RBC Capital Markets has raised its S&P 500 year-end price target to 6,250 from 5,730, its second hike this year, citing stronger investor sentiment and anticipated moderate GDP growth of 1.1%-2% in 2026. This upward revision occurs despite the S&P 500 easing from recent highs due to new tariff concerns, though the index remains up 6.4% year-to-date in 2025. While RBC maintained its 2025 S&P 500 EPS forecast at $258, it cautioned that it is still too early to dismiss the potential impact of tariffs based on initial earnings reports.

Analysis

RBC Capital Markets has significantly raised its year-end S&P 500 price target to 6,250, its second upward revision in 2025, signaling strengthening institutional optimism. This bullish stance is predicated on improved investor sentiment and a forward-looking focus on 2026, where both RBC and consensus forecasts anticipate moderate GDP growth between 1.1% and 2%. This move aligns with recent target hikes from BofA Global Research and Goldman Sachs, indicating a broader positive shift on Wall Street, even as the index has recently pulled back from all-time highs amid new tariff impositions. However, RBC's outlook contains notable caution; the firm maintains its 2025 EPS forecast at $258, slightly below consensus, and explicitly warns that it is too early to dismiss the potential negative impact of tariffs on corporate earnings.

Key Decisions for Investors

• Investors should recognize the strengthening institutional consensus for higher equity prices, as evidenced by consecutive target upgrades from major banks, which could provide a tailwind for the market.
• It is crucial to monitor geopolitical trade developments and tariff news closely, as RBC's own analysis flags that the negative impact on corporate earnings remains a key risk that could disrupt the bullish narrative.
• Given that the bullish price target is paired with a below-consensus EPS forecast for 2025, consider that the rally is heavily reliant on sentiment and multiple expansion rather than near-term earnings outperformance, making it potentially vulnerable to shifts in economic outlook or negative earnings surprises.