The S&P 500 (SPX) is set to open Wednesday’s trading session in the green following a price target hike from HSBC. The bank now expects the benchmark index to finish the year at 6,500, up from 6,400, citing strong second-quarter earnings that remained resilient in the face of tariffs. In addition, HSBC raised its 2025 S&P 500 EPS growth estimate to 12% from 9%, which is above the consensus estimate of 11%.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
“Companies with tariff concerns were mainly concentrated in the consumer staples sector,” said HSBC. “For 2H, we expect flattish S&P 500 margins as strength in tech and financials offsets pressure on consumer staples/discretionary.”
HSBC has raised its price target twice in the past month, previously lifting it to 6,400 from 5,600 in early August.
HSBC Highlights Concentration Concerns, Other Risks
HSBC points out that the top 10 largest S&P 500 companies now account for 38% of its total market capitalization and 32% of its total earnings. However, the bank believes that the strong balance sheets of these companies, as well as the other 490 companies in the index, help alleviate concentration concerns.
Other risks include a tariff-driven inflation revival and a weakening labor market, said HSBC. At the same time, improving geopolitical relations and productivity gains from AI could help offset these risks.
Stay ahead of macro events with our up-to-the-minute Economic Calendar — filter by impact, country, and more.