Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTHillary RemySat, July 4, 2026 at 12:07 AM GMT+2 4 min readWall Street spent most of 2025 convinced that Federal Reserve rate cuts were the unlock for the next leg of the stock market rally. That thesis did not play out the way most strategists expected.On June 30, Wells Fargo put a number on what the market has actually been running on instead.Wells Fargo Chief Equity Strategist Ohsung Kwon published a call on June 30 that tells a specific story about what moves equity markets higher. The details behind the bank's revision are more instructive than the headline target.Why Wells Fargo's S&P 500 target raise stands out from the crowdBanks raise their S&P 500 targets two ways. They can assume investors will pay a higher multiple for the same earnings, or they can raise their earnings estimates and let the math produce a higher target.Wells Fargo did the second, as TheStreet reported. The firm lifted its year-end target to 7,950 from 7,007, a jump of nearly 14%, but the earnings multiple barely moved, going from 23.2x to 23.4x. The whole move came from higher profit estimates.Wells Fargo raised its 2026 S&P 500 earnings-per-share estimate to $340 from $315 and bumped its 2027 forecast to $390 from $365, GuruFocus noted. Part of the foundation for that confidence is Q1 2026 itself, where S&P 500 companies posted 28% year-over-year earnings growth, the strongest pace since 2021."The path of direction for the equity market is still higher," Kwon said.More Wall Street: