S&P 500 Optimism Has Never Been This High — Market Strategist Explains Why That's Exactly The Problem

According to Bilello, the higher targets and growing optimism mean the upside is already priced in.

• According to Koyfin data, a majority of analysts covering the S&P 500's five largest constituents, Nvidia, Apple, Microsoft, Amazon, and Alphabet, currently have a ‘Buy’ or higher rating on the shares. 
• Earlier this week, JPMorgan raised its 2026 year-end target for the S&P 500 to 7,800 from 7,200, implying roughly a 6% upside from current levels. 
• JPMorgan also noted that the S&P 500’s climb going forward would “likely be non-linear, as the market will need to clear various hurdles.”  

After the benchmark S&P 500 has notched multiple record highs this year, Wall Street's optimism has reached unprecedented levels.

Nearly 60% of the index's stocks are now rated ‘Buy’ by analysts, the highest level on record, Charlie Bilello, Chief Market Strategist at the wealth management firm Creative Planning, said in a post on X on Thursday.

The bullish sentiment is evident among the index's top constituents. For context, according to Koyfin data, a majority of analysts covering the S&P 500's five largest constituents, Nvidia Corp. (NVDA), Apple Inc. (AAPL), Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN), and Alphabet Inc. (GOOG, GOOGL), currently have a ‘Buy’ or higher rating on the shares.

Broader S&P 500 Targets

Meanwhile, the S&P 500's record-setting rally has prompted a growing number of Wall Street firms to lift their year-end targets for the benchmark.

Earlier this week, JPMorgan raised its 2026 year-end target for the S&P 500 to 7,800 from 7,200, implying roughly a 6% upside from current levels. According to a CNBC report citing a note from the bank, strategist Dubravko Lakos-Bujas said easing geopolitical tensions between the U.S. and Iran have strengthened the case for a "Blue Sky" scenario for U.S. equities.

Barclays and Stifel also raised their year-end targets for the S&P 500 index to 7,800 this week, citing strength in corporate ​earnings, according to a Reuters report.

What Does This Mean?

According to Bilello, the higher targets and growing optimism mean the upside is already priced in. “When everyone is expecting good news, there's less room for positive surprises,” he said in the post.

Jeffrey Moore, co-founder of Global Smart, also responded to the post on X, saying, “60% Buys, 5% Sells, highest since 2010. Everyone is already bullish. That does not mean crash tomorrow, it means good news is priced in, and the surprise risk is down.”

Meanwhile, JPMorgan’s Lakos-Bujas also noted that the S&P 500’s climb going forward would “likely be non-linear, as the market will need to clear various hurdles.”  

“Strong back-to-back earnings have reset the bar higher heading into the 2Q season, making it more difficult for companies to significantly surprise to the upside on both earnings and capex,” Lakos-Bujas added.

Meanwhile, at the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.83% amid sustained weakness in technology stocks. The Vanguard S&P 500 ETF (VOO) was down nearly 1%, and the iShares Core S&P 500 ETF (IVV) fell 0.68%.

While the retail sentiment around SPY was in the “extremely bearish” territory at the time of writing, VOO and IVV were trending in the “bullish” territory.

The S&P 500 has climbed more than 7% so far this year. Earlier this month, the index climbed to a record high of 7,620.90.

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