LIVE MARKETS-Truce, tokens, and tech: Jefferies unveils their S&P 500 moonshot

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TRUCE, TOKENS, AND TECH: JEFFERIES UNVEILS THEIR S&P 500 MOONSHOT

Jefferies has set their year-end 2026 S&P 500 target at 7,500, citing robust earnings growth and continued investment in artificial intelligence.

The new target comes at a critical time for global investors, as the outlook reflects the intersection of resilient U.S. corporate profits, ongoing capital expenditure in artificial intelligence, and improving trade relations following the Trump-Xi summit, the brokerage said in a note published on Sunday.

"After comparing the profitable AI trade to the profitless dot-com bubble, we see more upside, despite potential roadblocks," said Desh Peramunetilleke, Head of Quantitative Strategy at Jefferies.

The note highlights the significance of stabilizing U.S.-China relations, with China cutting tariffs from 57% to 47% and suspending rare-earth export controls for one year, signalling a tactical pause in trade tensions.

While U.S. equities have underperformed the MSCI AC World ex-US index .MIWU00000PUS year to date, "it is fair to point out that the U.S. continues to report better earnings growth than other markets," they added.

Jefferies analysts say easing trade tensions, alongside expectations for Federal Reserve rate cuts in December and further reductions in 2026, are supporting the bullish outlook.

The Wall Street brokerage revised its sector ratings, upgrading Financials to Overweight and Utilities to Market Weight.

(Akriti Shah)

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