RBC raises 12-month S&P 500 target to 7,750 as more Wall Street firms turn bullish on stocks

RBC Capital Markets has become the latest Wall Street firm to signal confidence in US stocks, establishing a new 12-month price target for the S&P 500 (^GSPC) at 7,750.

RBC did not specify a prior 12-month price target as the firm has shifted to a rolling 12-month framework rather than a traditional year-end forecast.

The call, made by RBC’s head of US equity strategist Lori Calvasina, suggests the benchmark index could rise nearly 14% over the coming year, underscoring a growing chorus of analysts calling for another leg higher in the bull market.

The forecast is also among the more bullish on the Street, not far from the 8,000 year-end 2026 call issued by Deutsche Bank and in line with several firms expecting fresh highs.

Calvasina highlighted several key themes and macro dynamics she expects to support stocks over the next year, chief among them a potential drop in interest rates.

“Historically, when the Fed has made modest cuts in a 12-month period that amount to 1% or less, the S&P 500 has gone up by 13.3% on average during that same time period,” she said.

Markets are currently pricing in an 87% chance of a rate cut by the end of its December meeting next week, up sharply from roughly 30% just two weeks ago, according to the CME FedWatch Tool.

Economic conditions and strong corporate earnings are also central to the bull case. RBC argued that while economic growth may be uneven, the broader backdrop remains supportive of additional upside to the stock market as a whole.

On the earnings front, S&P 500 companies grew profits by 13.4% in the third quarter, according to FactSet, with Big Tech driving much of the expansion. That marked the fourth straight quarter of double-digit gains and was above the 10-year average of 9.5%, although still shy of the five-year average of 14.9%.

Calvasina noted that while 2025 was another year of leadership for mega-cap growth, a rotation into value stocks and the broader market has begun to take hold, a trend she expects could continue as earnings dynamics improve outside the Magnificent 7 companies.

“While we give an edge to value and the broader market over growth and the Mag 7 for now, we think it’s important to keep in mind that this tug of war may not be over yet,” she wrote.

For the economy, the outlook is more nuanced as growth moderates and the risk of a slowdown remains in focus.

“Unless recession risks become meaningful, we expect pullbacks in the S&P 500 to be limited to the 5-10% range,” Calvasina said, adding the bank generally expects a “stagflation light” environment in which inflation stays above target but growth remains positive.