Evercore's Emanuel keeps S&P 500 target at 7,750 as Fed holds steady

The Federal Reserve will not change interest rates this year, according to Evercore ISI's Julian Emanuel, who maintained his S&P 500 year-end target at 7,750.

"I don't believe the Federal Reserve will move on rates this year," Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, said.

Emanuel's call comes as oil prices have plunged from near $120 a barrel — a near three-year high — to briefly dip below $70 at the start of the week, easing a key inflation pressure. The S&P 500 has gained about 9.5% year-to-date after rising 17.9% in 2025, though volatility has increased in recent weeks.

The maintained 7,750 target implies roughly 8% upside from current levels, a more cautious stance than several Wall Street peers who have raised their forecasts above 8,000. Yardeni Research holds the Street-high target at 8,250, while Deutsche Bank, Goldman Sachs and Morgan Stanley all target 8,000.

Emanuel's analysis of historical data found that in scenarios where oil prices retreat rapidly after a spike, the S&P 500 has averaged a 17% gain over the subsequent 12 months, with moderate declines in realized volatility. He highlighted that information technology and consumer discretionary sectors exhibit the strongest upward momentum during such phases, consistent with the current structural bull market thesis driven by AI industry earnings.

The strategist argued that falling oil prices directly diminish recessionary headwinds, boost household purchasing power and sustain a virtuous cycle of a robust economy and strong employment. While energy sector earnings will face near-term pressure, the broader market will benefit from double-digit earnings growth expectations, he said.

The Fed's hold position contrasts with market pricing earlier this year that anticipated rate cuts. The Consumer Price Index has risen 4.2% over the past 12 months, keeping inflation as the public's top concern ahead of the Nov. 3 midterm elections.

For investors, Emanuel's call suggests the higher-for-longer rate environment will persist, favoring sectors with pricing power and strong balance sheets. The next key test for his thesis comes with the Fed's September meeting and the August CPI release on Sept. 13.

This article is for informational purposes only and does not constitute investment advice.