Throughout the tumultuous trading months of this year, Christopher Harvey has never flinched when it came to his Wall Street-topping S&P 500 SPX target of 7,007.
“I was asked many times if I was going to change [the target] and the answer was always, ‘No change,’” Harvey told MarketWatch in an interview on Tuesday.
“We felt the second half [of 2025] was always going to be much better. We thought that tariffs were a negotiating ploy, which turns out mainly to be true. We thought the underlying economy and the strength of the consumer, while not pristine or stellar, were still solid,” said Harvey, head of equity strategy at Wells Fargo Securities.
The S&P 500 has rapidly recovered, after nearly falling into bear-market territory to turn slightly positive for the year, but it still needs a 19% gain from here to reach Harvey’s goal. He’s had some past wins, with the index’s 2024 finish of 5,881 not far off the 5,830 he expected. He said the firm also correctly forecast a melt up in 2021 and selloff in 2022, though the latter ended up bigger than they thought.
As for his current goal? “It’s still a very healthy target. We still expect double-digit upside,” he said.
One path to his lofty target would be from Fed interest-rate cuts, he said, noting the firm has consistently expected two or three would come later this year.
“What we’re seeing is inflation expectations are coming down,” he said. “Some of our research is also indicating to us that corporations are not elevating prices the way the narrative is being portrayed. To that effect, price increases are quite modest.”
As consumers have been “very value oriented,” if prices do rise, they will either “substitute out or they’re going to change the way the basket looks. So it’s not actually clear to me we’ll realize some of these price increases,” he said.
Also baked into Harvey’s S&P 500 forecast was resolution or progress on trade talks, which has started to come after deals struck with the U.K. and China. “And when you resolve that or provide a clarity, that would provide a path for the Fed to start easing,” he said.
