The S&P 500 suffered its worst single-day drop since October on Friday, tumbling 2.5% amid jitters over AI spending and Broadcom’s earnings. Yet hours after the selloff, Citigroup strategist Scott Chronert lifted his year‑end target for the index from 7,700 to 8,100, implying roughly 10% upside. The move signals that Wall Street remains firmly in the bulls’ camp, and the risk‑on breeze could blow favorably for crypto markets.
Earnings, not multiple expansion, are seen driving the next leg. Citi bumped its 2026 earnings‑per‑share estimate to $350 (up from $320) and added a preliminary 2027 EPS target of $400. Chronert declared “high confidence in continued earnings beats” through 2026, noting that AI‑related demand is cascading beyond pure tech to other sectors. Goldman Sachs likewise raised its year‑end call to 8,000, banking on 24% annual EPS growth this year.
The AI investment cycle is being framed as a “one‑time capex supercycle,” not a typical business cycle. While Citi warns that a slowdown after 2027 could create a hangover effect, the firm stresses that risk is far off. For now, investors are zooming in on AI fundamentals, treating macro worries—Iran tensions, oil, inflation—as secondary.
Technically, the S&P 500 found buyers at the 7,360 support, the same level that launched the previous record run. Analysts see a test of 7,520 as the next hurdle; a break above could open the path to 7,640 and then the psychologically important 8,000 neighborhood. The volume‑weighted bullish structure remains intact as long as 7,360 holds.
For crypto, the upbeat story matters. Historically, sustained rallies in equities—especially when driven by real earnings and tech innovation—boost risk appetite, pushing capital toward digital assets. With AI‑themes dominating, tokens linked to AI or high‑beta altcoins could see an additional tailwind. The macro environment still carries risks (tight Fed, geopolitics), but the market’s focus on earnings growth paints a positive backdrop for the weeks ahead.
