RBC Lifts S&P 500 Target, Foresees Choppy Second Half

Wall Street Firm Adjusts Outlook Amid Shifting Economic Signals

Another prominent Wall Street institution has revised its year-end projection for the S&P 500 upward. RBC Capital Markets has increased its target for the benchmark index to 6,250 for 2025, a significant jump from its previous 5,730 forecast.

Shifting Projections and Market Sentiment

This nearly 9% increase places the S&P 500 at levels it was already approaching, suggesting a period of continued volatility and consolidation for the remainder of the year. Lori Calvasina, head of U.S. equity strategy at RBC, acknowledged the nuanced outlook. She noted that the new target is essentially in line with recent market performance.

“We feel neutral on the outlook for stocks in the 2nd half of 2025, and are mindful that our new price target is essentially in line with recent levels.”

—Lori Calvasina, Head of U.S. Equity Strategy, RBC

Calvasina further elaborated on the firm’s approach to forecasting.

“As a reminder, we see our price target as a compass, not a GPS, and a signaling mechanism about the path that we believe the stock market is currently on. We expect choppy conditions in the back half of the year, and swings in both directions.”

—Lori Calvasina, Head of U.S. Equity Strategy, RBC

Navigating Policy Uncertainty

The adjustment marks the fourth revision from RBC this year. Strategists across Wall Street are actively recalibrating their outlooks in response to significant shifts in trade policy and other developments originating from Washington. These changes come even as the S&P 500 continues to breach all-time highs. The updated 6,250 target brings RBC’s projection back in line with its mid-March forecast of 6,200.

This latest figure is an improvement from RBC’s April revision, when the target was lowered to 5,550 to account for a severe stagflation scenario. Despite the upward revision, market uncertainty persists, according to Calvasina. She anticipates a broad spectrum of potential outcomes, citing conflicting signals between positive sentiment indicators and more cautious GDP projections.

The firm’s recalibration is heavily influenced by its updated economic outlook. RBC now projects GDP growth of 1.1% to 2% for both 2025 and 2026. This suggests a more measured pace of economic expansion compared to previous expectations. RBC’s forecast for U.S. real GDP growth in 2024 is 2.3%, according to the Congressional Budget Office (CBO 2024).

Investor Focus Shifts to 2026

Calvasina observed a notable shift in investor sentiment.

“Investors have been telling us that they are ready to start pricing in 2026. While it seems early to us to do so, we think it’s important to be mindful of this shift in investor focus, and so we’ve added in a second GDP test that bakes in how stocks perform in years that precede real GDP in the 1.1-2% range.”

—Lori Calvasina, Head of U.S. Equity Strategy, RBC

Furthermore, RBC has deliberately excluded political factors from its 2025 target calculations, deeming such attempts no longer relevant, particularly given the stock market’s performance divergence from presidential approval ratings. The revised target of 6,250 remains slightly below the consensus estimate of 6,280, as surveyed by CNBC. Bank of America Merrill Lynch’s Savita Subramanian holds the next highest target at 6,300.