S&P 500, what target for the end of 2025?With the S&P 500 index (the S&P 500 future contract is used as a reference in this analysis) having surpassed its all-time record of 6,165 points at the end of June, and still against a backdrop of trade diplomacy, what technical and fundamental price target can we aim for over the next 12 months? 6,500 points? 6,700 points? 7,000 points? To answer this question, we need to cross-reference the median opinions of financial analysts with the theoretical objectives of technical analysis to assess the remaining potential of the S&P 500.
In terms of fundamentals, the new deadline for trade negotiations between the United States and its trading partners is Friday August 1, and the Fed is unlikely to cut the federal funds rate on Wednesday July 30.
1) Fundamentals and technical analysis: what are the common targets for the end of 2025?
I'd like to start by looking ahead to the next few months and establishing an average target for the S&P 500 between now and the end of the year. Naturally, this is a medium-term projection (several months) and leaves room for short-term correction/retraction phases. Bear in mind that even an underlying uptrend alternates between bullish impulses and short-term correction periods.
According to FactSet, financial analysts' median price target for the S&P 500 over the next 12 months is 6,700 points. As for the theoretical price targets of technical analysis, they are based here on Elliott waves and Fibonacci extensions, giving a range of between 6450 points and 6900 points.
The chart below shows the Japanese candlesticks in weekly data for the S&P 500 future contract with theoretical technical targets based on Fibonacci extensions.
The chart below comes from FactSet and represents the median target of financial analysts for the S&P 500 index with a 12-month horizon
2) Market tops are built on euphoria, and at this stage, sentiment indicators are not in a state of extreme optimism
Is the underlying bullish move under threat from market sentiment that has become over-optimistic? The answer is negative, according to the latest sentiment survey from the American Association of Retail Investors (AAII). The seller's tank is still full, with 39% expecting a bear market. Bear in mind that final market tops are built in euphoria, when the % of sellers falls to the bottom.
The survey below is conducted once a week by the American Retail Investor Association
3) Quantitative analysis does not yet describe an extreme overbought technical situation for S&P 500 stocks
Another approach, the quantitative approach to financial markets, also shows that the market is not yet in a risk zone of hyper-exposure to buying. The percentage of S&P 500 stocks above the 50-day moving average is not yet in the overbought zone.
In conclusion, although there will always be short-term technical corrections, the underlying uptrend of the S&P 500 is not threatened at this stage.
The blue curve below represents the percentage of S&P 500 stocks above the 50-day moving average. This is a quantitative analysis of the financial markets.
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