BNP Paribas sees S&P 500 ending next year at 7,500

BNP Paribas strategists expect the S&P 500 will end next year at 7,500, with the index supported by a solid U.S. economy that will fuel corporate profit growth and keep the labor market from weakening significantly.

A 7,500 finish in the benchmark U.S. index next year would mean about a 10% increase from the S&P 500’s current level of 6,829.

They also wrote in their 2026 global outlook note this week that their end-2026 forecast for the pan-European STOXX 600 index is 650, and the strategists see European stocks outperforming U.S. equities in 2026, thanks to accommodative European Central Bank monetary policy and increased fiscal spending.

Balyasny Asset Management posted a 2.5% return in November and is up 15.3% this year so far, a source told Reuters on Tuesday.

The $31 billion multi-strategy hedge fund had led many of its peers in its over-all performance to October.

Citadel’s flagship fund Wellington posted a 1.4% return in November, boosting the fund’s performance for the year to 8.3%, according to two people familiar told Reuters on Monday.

Man Group’s 1783 multi-strategy has returned around 12.5%, the firm’s website showed.

November returns numbers for other big multi-strategy funds was not yet available to Reuters.

Last month showed that ‘buy the dip’ stock market behavior is alive and well, but Wall Street has yet to regain early November peaks and tariff angst is proving hard to shake.

The final month of the year is off to a bumpy start. U.S. manufacturers registered an ongoing contraction of activity as input price growth turned higher again from already elevated levels, with tariffs widely blamed.

ISM’s November factory readout was enough to lift Treasury yields sharply across the curve on Monday and sowed a kernel of doubt about this month’s widely expected Federal Reserve interest rate cut. A third Fed cut of the year on December 10 had been almost fully priced prior to the report, but the chances of a move have been pared back slightly to just over 80%.

Fed policymakers are in their traditional quiet period ahead of the meeting, so no more public guidance is expected before then. But the ISM report re-introduced the tariff question.

With the Supreme Court yet to rule on the legality of President Donald Trump’s use of emergency powers to introduce the levies, retailers too were emphasizing the pressure.

Costco became the latest firm to sue the U.S. government to ensure it will receive refunds if the Supreme Court rejects Trump’s sweeping authority to impose those tariffs.

The discomfort spread to stock and bond markets on Monday, with the S&P 500 falling back about 0.5% - irked additionally by the ongoing shakeout in crypto markets. Bitcoin lost more than 5% on Monday, relapsing back below $90,000 before steadying earlier today, and crypto stocks were hit too.

Firmer crude oil prices also weighed after the weekend decision from OPEC+ to keep output levels unchanged early next year.

But with Tuesday’s calendar thin, world markets have calmed somewhat before today’s bell.

U.S. stock index futures crept back higher, with European stocks higher too. South Korea’s Kospi benchmark outperformed again with gains of almost 2%.

U.S. Commerce Secretary Howard Lutnick on Monday confirmed the general tariff rate on imports from South Korea, including on autos, would drop to 15% from last month because South Korea has introduced legislation in parliament to implement the country’s strategic U.S. investment commitments.

Japan’s Nikkei also held the line after a heavy loss there on Monday on stepped up speculation about a Bank of Japan interest rate rise this month. Japanese government bond yields and the yen eased back a bit after a decent 10-year debt auction there.