Wells Fargo Strategist Sticks to Bold S&P 500 Target of 7,007
Despite a volatile trading year, Christopher Harvey, head of equity strategy at Wells Fargo Securities, remains firm in his ambitious S&P 500 target of 7,007. Speaking with MarketWatch, Harvey emphasized that even as markets swayed and skepticism mounted, he never considered changing his forecast.
“I was asked many times if I was going to change [the target] and the answer was always, ‘No change,’” Harvey said on Tuesday.
Harvey’s confidence stems from his view that the second half of 2025 will see improved market conditions. “We believed tariffs were largely a negotiating tactic — and that has proven mostly true. Meanwhile, the U.S. consumer and broader economy, while not booming, are still on solid footing,” he explained.
Though the S&P 500 has clawed back from near bear-market territory to just above breakeven for the year, it still requires a nearly 19% rally to hit his 7,007 goal. Harvey has seen past success in his predictions — he closely pegged the 2024 year-end level at 5,881 versus his forecast of 5,830. His team also correctly called the 2021 market melt-up and a 2022 downturn, though the latter exceeded expectations.
“We still see a very healthy upside,” he said, citing double-digit growth potential. One major catalyst for that bullish outlook? Interest rate cuts. Wells Fargo has long anticipated two to three rate reductions later this year.
“Inflation expectations are falling, and our research suggests companies aren’t hiking prices as aggressively as some narratives suggest,” Harvey noted. He added that consumer price sensitivity is forcing businesses to stay competitive. “People will either swap out goods or alter their consumption habits if prices rise too much.”
Trade progress is another pillar of Harvey’s outlook. Agreements with the U.K. and China are fostering clarity and potentially paving the way for Fed policy easing. “We think the 90-day tariff pause between the U.S. and China puts pressure on other countries to engage in more productive trade talks,” he said.
With those macro issues clearing up, Harvey believes attention can shift back to market fundamentals. He sees strength in long-term trends such as artificial intelligence (AI), regulatory changes, and upcoming merger and acquisition activity.
The AI theme, Harvey said, is gaining traction despite earlier concerns about investment returns. Unlike the overleveraged telco build-out of the 1990s, today’s AI infrastructure is backed by well-capitalized companies moving swiftly from development to commercialization.
His team recently highlighted a group of “picks and shovels” stocks — key players in the AI ecosystem — with valuations now more in line with the broader market. Companies on the list include Nvidia, Broadcom, NextEra Energy, Arista Networks, and Marvell Technology.
Harvey likens this year’s market shock to the pandemic — both driven by external events rather than internal economic weakness. “Balance sheets and the real economy are in decent shape. Not perfect, but stable,” he said.
That underlying stability, he argues, justifies maintaining the bold 7,007 S&P 500 target. Still, Harvey acknowledges risks remain. “We’re not out of the woods yet. There are still concerns that interest rates could rise again, and that’s something we’re closely watching,” he said.
