Top Analyst Sees the S&P 500 at 10,000. He Says He Can’t Find a Reason It Won’t Happen
On CNBC’s Investment Committee, Joe Terranova (who is the Senior Managing Director for Virtus Investment Partners) said, “I think you get to 10,000 in the next 18 months. I see no reason why not.” The S&P 500 closed last Friday with the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) at 772.67, up 13.85% for the year, and Terranova’s target sits alongside a 2026 target of 8400 from Ed Yardeni and a view from Evercore that 9000 is attainable within twelve months.
The reasoning rests on two claims: first, that “Earnings are at really a historic pace for the last seven quarters”. Second, that breadth has widened, with the panel noting every sector positive for the year and earnings growth running around 14% on average across sectors. Both claims are supported by the data. Whether they justify a specific round number on an eighteen-month clock is worth taking seriously rather than treating as a headline.
The Earnings Case Is Real, but the Timeline Is Not
Terranova’s historic pace claim holds up. According to Bureau of Economic Analysis data, corporate profits reached $4.4 trillion in the first quarter of 2026, the highest reading in the current dataset, growing 12.8% year over year. Manufacturing profits recovered from $591.1 billion in early 2025 to $773.3 billion a year later. The Federal Reserve has cut the funds rate from 4.5% a year ago to 3.75% today, which supports valuations at the margin. JPMorgan puts consensus S&P 500 earnings growth at 13% for 2026, with Magnificent 7 growth near 20%.
None of that maps to a specific index level on a specific date. Earnings growth at the current pace justifies continuing to own stocks. It does not resolve what multiple the market will pay eighteen months from now, and multiple compression is where large equity forecasts most often go wrong. If you find the earnings argument persuasive, the reasonable conclusion is to stay invested, though that differs from underwriting a round number on the calendar.
Reading the Quiet Market
Terranova’s most useful point was reframing low volatility. He said, “The market is more tactical. And just because it appears as though maybe volatility and the environment is a little bit slower, that is not a reason to sell. That’s actually indicative of a market that is waiting to re-accelerate as we move into the fall.” The VIX closed at 14.25, in the bottom 2.3% of its trailing twelve-month range, having compressed from a March spike of 31.05.
His reading is more persuasive than the complacency read, because low VIX during earnings expansion has more often preceded further gains than tops. What would change my mind is a sustained rise in the 10-year yield through the year’s peak. That yield sits at 4.63%, in the 92.7th percentile of the past year, with the recent high at 4.75% on July 31. A break above that level, absent a growth reason, would compress multiples and take the earnings case with it.
The Gap Between Risk Talk and Positioning
The panel flagged rising long-term yields, the possibility that AI capital spending may disappoint, and stretched valuations, though no participant argued for reducing equity exposure. That gap is where investors most often get hurt, because acknowledging a risk in conversation differs from pricing it into a portfolio.
Consumer sentiment reinforces the point. The University of Michigan reading came in at 49.5, near recessionary levels and in the 9.1th percentile of its historical range. Corporate profits and household mood are telling different stories, and the market is siding with profits.
The 10,000 call is an expression of momentum dressed as a target, and that is fine so long as you treat it that way (riding a rally is reasonable as long as the exit is planned, which is the whole subject of our free bubble survivor’s handbook). The earnings case supports staying invested, though it stops short of endorsing a round number on an eighteen-month clock. If you are at or near retirement, the correct response to a forecast like this is usually nothing. For most long-term investors, scheduled rebalancing and a steady fixed income allocation tend to matter more than reacting to round-number forecasts.
Contact [email protected] for any questions or corrections.