S&P 500 to Hit 9000 in 2027? ETFs in Focus

U.S. stocks staged a strong comeback to start the week as falling oil prices, surging bitcoin prices and renewed enthusiasm for artificial intelligence (AI) lifted investor sentiment. Technology stocks rallied ahead of an expected dinner between AI industry leaders and Chinese President Xi Jinping later this week.

The tech-heavy Nasdaq Composite led the gains, jumping 2.3% on Sept. 21, 2026, to close at a new all-time high. The S&P 500 advanced 1.5%, while the Dow Jones Industrial Average rose about 0.8%.

The latest rally highlights the resilience of U.S. equities despite several recent challenges. Stocks have continued to advance during a historically weak month, despite higher bond yields, geopolitical risks in the Middle East, expectations for additional Fed rate hikes and concerns about the sustainability of the AI boom weigh on sentiment.

AI-related stocks were among the biggest gainers on Sept. 21, 2026 as enthusiasm returned to the technology sector. Meta Platforms (META), Advanced Micro Devices (AMD) and Intel (INTC) jumped by double digits.

The gains came ahead of the anticipated meeting involving major AI executives and Chinese President Xi, fueling hopes for greater cooperation and developments in the AI industry.

Investor sentiment also improved as oil prices retreated below $100 per barrel amid hopes that the United States and Iran could resume diplomatic talks. Lower energy prices could help ease inflationary pressures that have complicated the Federal Reserve's policy outlook.

Bitcoin surged past $86,000 to an eight-month high, as reported by Yahoo Finance, extending gains across the broader cryptocurrency market. The rally lifted crypto-linked stocks, including Strategy (MSTR) and Coinbase (COIN).

The S&P 500 will end 2026 at 7,900, per analysts and portfolio managers polled between August 12 and 25, as quoted on Reuters. Major Wall Street brokerages project the S&P 500 year-end 2026 target to range between 7,100 and 8,100, as mentioned in an INDmoney article published in July.

Goldman Sachs Research expects year-end 2026 target for the S&P 500 at 8,000, up 3% from the current level. Jefferies also set an 8,000-year-end target for the S&P 500 in 2026, based on 35% earnings growth and $373 EPS, versus consensus growth of 29%, per investing.com, as cited by Yahoo Finance.

In any case, the fourth quarter draws significant investor attention as festivities during this period generate substantial business for many industries. The Santa Rally keeps the stock market charged up, and in most years, stocks fare better.

Jefferies sees the index reaching 9,000 by the end of 2027, supported by $450 EPS and 20.8% earnings growth. Strong earnings and continued AI investment are key drivers of this bullish outlook.

Consensus 2026 earnings growth has climbed to 29% from about 13% at the start of the year. Growth is also broadening beyond the Magnificent 7, with earnings for the rest of the S&P 500 expected to rise about 24%.

Jefferies estimates AI- and data-center-related companies account for about 46% of the S&P 500, with earnings projected to grow 60% in 2026. Growth is expected to moderate to 24% in 2027, while both AI-related companies and the broader index are projected to maintain double-digit earnings growth.

Against this mixed backdrop, investors may track S&P 500 exchange-traded funds (ETFs) suchas Vanguard S&P 500 ETF VOO, iShares Core S&P 500 ETF IVV, SPDR S&P 500 ETF Trust SPY, State Street SPDR Portfolio S&P 500 ETF SPYM and Invesco S&P 500 Momentum ETF SPMO. SPYM charges 2 bps in fees annually while VOO and IVV charge 3 bps in fees each. SPY is a relatively expensive choice, with a 0.09% expense ratio.

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This article originally published on Zacks Investment Research (zacks.com).