Global brokerage HSBC has adopted a more optimistic stance on US equities, raising its year-end 2026 target for the S&P 500 from 7,500 to 7,650. This adjustment is attributed to stronger-than-expected corporate earnings, particularly in the technology sector, which has shown resilience and is expected to drive earnings per share (EPS) growth of 20% in 2026, reaching approximately $325 per share. HSBC noted that if investor sentiment broadens beyond a few leading tech companies, the index could potentially breach the 8,000 mark. Factors contributing to this optimistic outlook include a re-rating of technology stocks, increased participation from other sectors, and the monetization of artificial intelligence investments. However, HSBC also highlighted risks such as a slowdown in technology earnings, elevated oil prices, and a more hawkish Federal Reserve, which could pose challenges to sustained market growth. Despite these risks, the recent rally in US equities has been supported by robust earnings from AI-linked companies and easing geopolitical tensions in West Asia.