HSBC just hiked its price target for the S&P 500. Here's what the bank expects

HSBC's outlook for the stock market just got rosier. Nicole Inui, the bank's head of equity strategy for the Americas, hiked her year-end S & P 500 target to 8,100 from 7,650. Inui's new target would mark a 5% increase from Friday's close and a roughly 18% advance for the year. .SPX YTD mountain S & P 500 in 2026 The main driver: strength in corporate earnings. Inui said earnings per share expansion is running near 40% for the first half of 2026. She said to expect continued momentum in the backhalf of the year, with growth at a clip of at least 25%. Capital expenditures around artificial intelligence is a main reason for that view, according to Inui. On top of that, she said a "resilient" macro environment and consumer backdrop can help stocks that aren't tied to AI. "A strong Q2 reporting season, broad-based upward earnings revisions, and sustained AI capex spending reinforce our conviction that earnings strength can persist into year-end," Inui wrote to clients in a note. Inui said recent investor worries about the impact of Federal Reserve rate hikes, the midterm elections, geopolitics and liquidity appear to be "overdone." Still, she said traders should be ready for seasonal weakness. Plus, she said inflation reports and regulatory variables around businesses like social media and data centers could increase volatility. With Inui's price target hike, she's now one of the most bullish on Wall Street for the S & P 500 into the end of the year, according to CNBC Pro's market strategist survey . Inui's expectation is 2.3% above the average seen in the poll. The S & P 500 has jumped more than 12% in 2026, on track for its fourth-straight winning year. But the climb hasn't been steady, with index has experiencing volatility as the war with Iran broke out.