Evercore ISI Sets S&P 500 Bull Case at 9,000 for 2026

The S&P 500 could climb to 9,000 within the next 12 months, according to a new bull-case forecast from Evercore ISI strategist Julian Emanuel. This optimistic scenario represents a 16% upside from the index's recent closing level of 7,785.76, signaling that the strategist expects the current equity rally to extend well into 2026 [2].

The Case for a Market Melt-Up

Emanuel’s framework for the 9,000 target rests on the absence of traditional bull-market killers, specifically noting that recession risks and spiking long-end yields have failed to materialize [2]. While the Fed Funds target upper bound sits at 3.75%, down from a 4.50% peak in September 2025, the 10-year/2-year Treasury spread remains positive at 0.40% [1]. With recession probability in prediction markets falling to 13% from 36% in late March, Emanuel argues that the macro environment remains supportive of further gains [1].

The primary engine for this potential surge is the $7.9 trillion currently held in money market funds, which Emanuel characterizes as "dry powder" waiting to be deployed into risk assets [4]. This liquidity, combined with M2 money supply levels at $22.80 trillion—ranking in the 90.9th percentile historically—suggests that the opportunity cost of holding cash is no longer rising [1]. Furthermore, Emanuel points to the recent SpaceX IPO as a psychological catalyst, comparing the public's enthusiasm to the 1995 Netscape debut that preceded the internet-era bull market [4].

Earnings and Sector Positioning

The valuation argument for the 9,000 target relies on earnings growth outpacing multiple expansion [1]. Consensus estimates project S&P 500 EPS growth of 11% in 2025 and 13% in 2026, with the "Magnificent 7" stocks tracking at 20.3% growth [1]. Evercore ISI maintains an Outperform rating on information technology, communication services, and consumer discretionary sectors, citing their exposure to innovation and corporate spending [3].

Conversely, the firm remains cautious on energy, industrials, and materials, assigning them Underperform ratings due to less favorable growth prospects [3]. Despite the aggressive bull case, Emanuel acknowledges that the market is maturing, noting that the S&P 500 typically sees below-average returns in the later stages of a cycle [4].

What to watch

• IPO Volume: Monitor whether annual IPO volumes approach the 0.75% to 0.91% of S&P 500 market cap levels seen at previous market peaks; current issuance is tracking at 0.5% [4].
• Consumer Sentiment: Watch the index level of 49.8, which remains below the 60-point recessionary threshold [1].
• Diversification Trends: Track the number of stocks on Evercore’s "Negative Beta" list, which recently hit a record 121, as a gauge of investor hedging behavior [2].

Whether the index reaches the 9,000 milestone depends on the transition of sidelined cash into equities, a move that would require sustained investor confidence in the face of maturing cycle dynamics. The central question remains whether the current "Dream Big" sentiment can avoid the speculative excesses that historically preceded market corrections.