MW Wall Street's biggest bull held his nerve throughout this year's selloff. What he's saying now.

By Barbara Kollmeyer

Wells Fargo Securities' head of equity strategy says S&P 500 can make it to 7,007

Throughout the tumultuous trading months of this year, Christopher Harvey has never flinched when it came to his Wall Street-topping S&P 500 SPX target of 7,007.

"I was asked many times if I was going to change [the target] and the answer was always, 'No change,'" Harvey told MarketWatch in an interview on Tuesday.

"We felt the second half [of 2025] was always going to be much better. We thought that tariffs were a negotiating ploy, which turns out mainly to be true. We thought the underlying economy and the strength of the consumer, while not pristine or stellar, were still solid," said Harvey, head of equity strategy at Wells Fargo Securities.

The S&P 500 has rapidly recovered, after nearly falling into bear-market territory to turn slightly positive for the year, but it still needs a 19% gain from here to reach Harvey's goal. He's had some past wins, with the index's 2024 finish of 5,881 not far off the 5,830 he expected. He said the firm also correctly forecast a melt up in 2021 and selloff in 2022, though the latter ended up bigger than they thought.

As for his current goal? "It's still a very healthy target. We still expect double-digit upside," he said.

One path to his lofty target would be from Fed interest-rate cuts, he said, noting the firm has consistently expected two or three would come later this year.

"What we're seeing is inflation expectations are coming down," he said. "Some of our research is also indicating to us that corporations are not elevating prices the way the narrative is being portrayed. To that effect, price increases are quite modest."

As consumers have been "very value oriented," if prices do rise, they will either "substitute out or they're going to change the way the basket looks. So it's not actually clear to me we'll realize some of these price increases," he said.

Also baked into Harvey's S&P 500 forecast was resolution or progress on trade talks, which has started to come after deals struck with the U.K. and China. "And when you resolve that or provide a clarity, that would provide a path for the Fed to start easing," he said.

Harvey expects uncertainty over trade talks will linger, but believes the 90-day U.S.-China tariff pause could speed up other deals. "I think it puts pressure on many nations, especially allies, to start to come to the table and produce more fruitful conversations."

And now that investors have signs of trade progress, "we can now start getting back to the fundamentals and moving away from a lot of the macro overhang, which was clouding the picture."

"The underlying fundamentals as we look at them over the next 6, 12, 18 months, we think are very constructive related to the secular trade in AI, due to the change in the regulatory environment and expected M&A activity over the next 12 to 18 months," he said.

Harvey says the AI trade, which was plagued by doubts coming into 2025 over whether investments would pay off, is "quite robust."

Read: Nvidia surpasses $3 trillion market cap on hopes for U.S. chip deal with Saudi Arabia

He said investors should remember that AI is very different from the internet boom of the late 1990s, when the "telco build-out was funded by highly levered companies that needed to tap the credit market" to fund it. Fast forward and "some of the best and brightest are funding the capex build out" of AI, as the realization and commercialization of that technology is also happening a lot faster.

Earlier this month, his team produced a screen of stocks - so-called picks and shovels - whose valuations they view as now closer to that of the broader market . He said their bets are across sectors. Nvidia $(NVDA)$, Broadcom $(AVGO)$, NextEra Energy $(NEE)$, Arista Networks $(ANET)$ and Marvell Technology $(MRVL)$ are just a few names on that screen.

Harvey said the crisis seen for markets this year resembles that of the pandemic, both caused by exogenous shocks. But for both "the underlying economy and underlying balance sheets were actually in okay shape. Again not crispy, but okay shape," he said.

And that's another big reason why he said the firm stuck to the S&P 500 target. "We always felt that the fundamentals were solid," unlike what was seen in past crisis.

Harvey concedes it's not a risk-free market. "We're not out of the woods yet, but we are seeing rates backing up, and there are some calls for interest rates to go higher for various reasons, and that's a concern that's on our radar and could cause a near-term hurdle or a near-term ceiling," he said.

The markets

U.S. stock futures (ES00) (YM00) (NQ00) are tilting lower, with Treasury yields BX:TMUBMUSD02Y BX:TMUBMUSD10Y dipping, and gold (GC00), oil (CL00) and the dollar DXY also lower.

   Key asset performance                                                Last       5d      1m      YTD      1y 
   S&P 500                                                              5886.55    4.99%   9.08%   0.08%    12.20% 
   Nasdaq Composite                                                     19,010.08  7.46%   13.00%  -1.56%   15.13% 
   10-year Treasury                                                     4.478      20.40   19.60   -9.80    13.40 
   Gold                                                                 3233.2     -6.06%  -0.43%  22.50%   36.80% 
   Oil                                                                  63.35      7.37%   2.96%   -11.85%  -19.25% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The buzz

Mobile-app stock and digital-currency company eToro $(ETOR)$ aims to raise $620 million on the Nasdaq later with a $52-per share debut.

Tesla's $(TSLA)$ board is reportedly looking into a new pay deal for CEO Elon Musk. Read: Elon Musk pay talks at Tesla present dilemma given automaker's premium and his controversial profile

Cisco Systems $(CSCO)$ will report after the close.

Alibaba's Taobao, Tmall and other China e-commerce platforms are offering steep discounts on Apple's $(AAPL)$ iPhone 16.

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Top tickers

These were the top searched stock-market tickers on MarketWatch as of 6 a.m.:

   Ticker  Security name 
   TSLA    Tesla 
   NVDA    Nvidia 
   GME     GameStop 
   PLTR    Palantir 
   SMCI    Super Micro Computer 
   AAPL    Apple 
   TSM     Taiwan Semiconductor Manufacturing 
   UNH     UnitedHealth 
   AMZN    Amazon 
   AMD     Advanced Micro Devices 

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-Barbara Kollmeyer

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May 14, 2025 06:49 ET (10:49 GMT)

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