RBC Raises S&P 500 Target to 8,150, Warns Fed Rate Hikes Could Trigger Volatility
Miles Bennett
RBC Capital Markets raised its 12-month S&P 500 target to 8,150, implying roughly 10.8% upside — but chief strategist Lori Calvasina warned that a potential Fed rate hike remains the top risk.
Where does the 8,150 target come from?
RBC's US equity strategy head Lori Calvasina lifted the S&P 500 target by 250 points to 8,150, implying about 10.8% upside from last Friday's close.
The upgrade rests on what she called "stronger signals" from earnings and valuation expectations. Her model assumes trailing four-quarter EPS — the sum of the last four quarters' earnings — reaches $337 by Q1 next year.
She described the forecast as "higher but not aggressive." This means → she sees more upside ahead, but the path is unlikely to be a straight line — expect bumps along the way.
What is the biggest risk?
Calvasina's top concern: the Fed may raise rates.
CME FedWatch currently prices a 64% probability of a hike at the September meeting. This means → more than six in ten dollars are betting on a hike — this is not a tail-risk scenario.
She noted, however, that the team's worry has "slightly eased" versus a month ago, citing falling oil prices and an improving inflation outlook as factors that could reassure investors.
If a hike comes, how far could the market fall?
Calvasina offered a conditional view: as long as recession fears stay low and the Fed delivers only a "moderate" hike, she expects a 5% to 10% pullback.
In plain terms = she sees a "routine correction," not a crash — provided the economy itself holds up.
Is this target high or low by Wall Street standards?
The average year-end target among strategists tracked by CNBC Pro is 7,807 — roughly 4% below Calvasina's 8,150. This means → her call is optimistic relative to peers, but not extreme.
For context, the S&P 500 is up more than 8% year-to-date in 2026, on track for a fourth consecutive year of positive returns. This reflects a market still in a bullish trend — yet the higher it climbs, the more sensitive it becomes to negative catalysts.
Content is for reference only, not financial advice.