UBS Boosts S&P 500 Annual Forecast to 6,600

UBS has raised its annual target for the S&P 500 to 6,600. The S&P 500 has fallen for the fifth straight day amid a Walmart selloff and fading probability of a Fed rate cut ahead of Powell's Jackson Hole speech. However, the TSX has closed above 28,000 for the first time, driven by a rise in resource shares.

UBS has increased its annual target for the S&P 500 to 6,600, signaling a bullish outlook despite recent market volatility. The S&P 500 has experienced a decline for the fifth consecutive day, driven by a selloff in Walmart and waning expectations of a Federal Reserve (Fed) rate cut ahead of Chair Jerome Powell's Jackson Hole speech. However, the TSX has closed above 28,000 for the first time, buoyed by gains in resource shares.

According to Traders Union, the current S&P 500 (SPX) price stands at $6,370.17 [1]. The analytical team at Traders Union forecasts that the price of SPX may reach $6,749.7 by the end of 2025 and $8,217.45 by the end of 2029. The recommendation for the D1 (one-day) timeframe is Neutral, while for the W1 (one-week) timeframe, it is Buy. This suggests that while short-term volatility may persist, longer-term trends are expected to be favorable.

The TSX's performance, on the other hand, has been driven by the rise in resource shares. The TSX, which is the primary stock exchange in Canada, has seen its index close above 28,000 for the first time, demonstrating the resilience of the Canadian economy, particularly in the resource sector.

A Morgan Stanley study revealed that AI adoption could lead to annual savings of nearly $920 billion for S&P 500 companies, primarily through wage reductions and increased productivity [2]. This significant cost saving is expected to have far-reaching implications across various industries, potentially translating into a $13-$16 trillion boost in market value for the S&P 500.

Investors should remain cautious about the short-term volatility but keep an eye on the long-term trends and potential benefits of AI adoption. The market is expected to continue to be influenced by geopolitical events and central bank policies, which may cause fluctuations in the near term.

References:
[1] https://tradersunion.com/currencies/forecast/spx-500/
[2] https://theoutpost.ai/news-story/morgan-stanley-study-ai-could-save-s-and-p-500-companies-nearly-1-trillion-annually-in-wages-19253/