S&P 500 Could Smash 7,000 Soon—If Traders' Moonshot Bets Are Right

Wall Street traders are doubling down on a year-end surge in the S&P 500 as the index powers to fresh record highs, seasonality kicks in, and the Federal Reserve prepares for other rate cuts — with some now eyeing a moonshot rally reminiscent of the late 1990s.

The S&P 500, as tracked by the Vanguard S&P 500 ETF (NYSE:VOO), was up for a fourth straight session Tuesday, climbing above new records at 6,880. In October, the broader market is up 2.9% on track to notch its sixth straight month of gains.

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S&P 500 Meltup Odds Climb

According to Kalshi, a CFTC-regulated prediction market platform, betting odds have surged for the S&P 500 to end the year between 7,000 and 7,199, a range that implies another 2% to 4.8% upside from current levels.

That scenario now carries a 27% probability, making it the most bet-on range.

Even more bullish outcomes are gaining traction. Odds of the S&P ending between 7,200 and 7,399 have climbed to 18%, up 8 percentage points from just a day earlier, implying nearly a 1-in-5 chance of a 4.9% to 7.75% rally in the final weeks of the year.

Some traders are even targeting a finish as high as 7,600, with 7% odds now assigned to that outcome — a 7.8% to 10.8% gain from current levels.

“While the market’s past few days of gains might be perplexing to some investors, there is justification for this latest meltup in stocks,” Paul Stanley, chief investment officer at Granite Bay Wealth Management.

Historically, the final two months of the year are strong for equities. Over the past 10 years, the S&P 500 has gained an average of 4% in November and December combined. If that repeats, the index would end 2025 near 7,150, right in line with the most-watched betting range.

‘Fly Me To The Moon’ Playing Again

Veteran strategist Ed Yardeni on Monday raised his odds of a stock market meltup to 30%, while trimming the chances of his base-case bullish scenario from 55% to 50%.

“In our base-case scenario, the S&P 500 stock price index rises to 7000 by the end of this year and 7700 by the end of next year,” Yardeni said, but added that a meltup could push prices beyond those targets well ahead of schedule.

That, he warned, could also raise the probability of a correction, bear market, or even meltdown in 2026.

Since last Friday’s cooler-than-expected 3.0% CPI report, which sent stocks surging and bond yields falling, Yardeni said they’ve been humming Frank Sinatra’s “Fly Me To The Moon.”

The CME FedWatch Tool now reflects a 90% probability of two more rate cuts before year-end, taking the federal funds rate down to 3.50%.

Technical Setup Signals Room to Run

Bank of America’s chief technical strategist Paul Ciana said Friday’s breakout following the CPI report confirms that the market remains in a strong uptrend, breaking out of a five-week consolidation.

“The S&P 500 continues to climb the wall of worry,” Ciana said, noting that momentum signals like MACD have flipped bullish but remain diverging — a possible warning.

He added that support lies in the 6,749–6,772 zone, while breakout extensions point to targets at 6,980, 7,086, and possibly 7,400, based on head-and-shoulders measured moves.

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