Wall Street Sees This Vanguard Index Fund Poised to Surge in 2026
David Dierking, The Motley Fool
Wed, July 29, 2026 at 3:42 PM GMT+5:30
3 min read
- ^GSPC
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The S&P 500 (SNPINDEX: ^GSPC) posted double-digit returns in each of the past three calendar years. With a year-to-date return of 8.3% through July 24th, it’s on pace to run that streak to four years, something that has only been accomplished once before, just before the tech bubble burst
But that can be a double-edged sword. Corporate earnings growth has been strong, and the labor market looks relatively strong despite inflation and geopolitical concerns. But investors have grown accustomed to these gains and to an almost uninterrupted rally in tech and artificial intelligence (AI) stocks
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However, many analysts see the rally continuing. Many see another 8% upside for the S&P 500 by year-end, with one recently raising its target to 9,000
More than 10 brokerages call for 8,000+ on the S&P 500
Several major brokerages, including Morgan Stanley, Citigroup, Goldman Sachs, and Deutsche Bank, have current targets on the benchmark index of 8,000 to 8,300, implying large-cap stocks could climb another 8%-12%
The most optimistic call comes from Evercore. The company’s chief equity strategist, Julian Emanuel, recently raised his price target from 7,750 to 9,000. That would mean another 20% gain for the S&P 500 from here
The Vanguard S&P 500 ETF (NYSEMKT: VOO) would be the clear way to invest based on this. It allows investors easy access to the S&P 500 with a razor-thin expense ratio of just 0.03%
Why the Vanguard S&P 500 still has upside in 2026
The biggest catalyst for the S&P 500 would be continued double-digit earnings growth. FactSet Research estimates currently call for 27% earnings growth in 2026 and another 15% in 2027. Tech is still considered the primary earnings driver for this forecast
To be fair, though, we’re starting to see negative reactions to capital expenditures plans and their impact on free cash flows. Alphabet, for example, raised its 2026 capital expenditures guidance and reported negative free cash flow in its Q2 report. The stock fell roughly 7% the following trading day
As markets focus more on results and less on hope, signs of overspending or slowing growth could prompt selling
The investment case for the Vanguard S&P 500 ETF remains solid as long as companies deliver on earnings expectations. Evercore’s 9,000 target, however, seems optimistic. But there’s no question that the S&P 500 consistently makes for a strong long-term investment. Many analysts remain confident that the current rally can continue
