The S&P 500 closed above 6,900 on Tuesday, setting a new record high and spurring market-watchers to wonder if 7,000 is the next stop for this raging bull market.
What’s the big deal about 7,000 other than it’s a relatable, round number? Does it hold any true decision-making significance for traders, institutional or otherwise?
Well, it depends on who you ask.
Mary Ann Bartels, chief investment strategist at Sanctuary Wealth, says every big round number is psychological whether you're talking about the S&P or the Dow. In her view, when new record highs are reached, investors tend to question whether or not they should put new money to work.
“When a market index gets close to a round number, everyone is focused on it, and sometimes it just takes a while to get through it. If you're truly in a bull market, you eventually move past the milestone - it's just a process. It's just a number and once you go through it, very few people talk about it anymore,” Bartels said.
Reminisces Bartels: “I remember Dow 10,000 back in 1999, and many investors were excited about this level well before it crossed this. There's always anticipation about these big round numbers in the indices well before the threshold is reached.”
Along similar lines, Chris Brigati, chief investment officer at SWBC, believes that when the market exceeds a big round number it generates investor attention, excitement and optimism, which are key ingredients for even further strength in stocks. According to Brigati, S&P 7,000 is even more significant during a year like 2025 due to the tariff-driven correction the market experienced in April.
“What a difference a few months make! It's an important lesson for investors that the market climbs the wall of worry and has a way of snapping back much faster than expected,” Brigati said.
WHAT’S THE NEXT LEVEL TO WATCH?
Bartels believes better than expected earnings have been driving the market to its record levels. She says investors have underestimated the power of the growth in earnings and the next level to watch is 10,000 because, well, it's a big round number.
“We expect the S&P 500 to hit 10,000 towards the end of this decade. While we may have pullbacks along the way, we believe the S&P 500 is tracking towards 10,000 driven by the innovations of artificial intelligence, blockchain and virtual reality,” Bartels said.
Meanwhile, Brigati believes the next meaningful level for the S&P 500 after reaching 7,000 is likely 7,500 simply because of the psychological significance of the level.
“After that the 7,700 level is noteworthy since it represents a 10% rise from 7,000 which is my year-end 2025 target for the Index at the moment - and may need to be revised higher,” Brigati said.
Finally, James Demmert, chief investment officer at Main Street Research, says milestones such as the S&P 500 hitting 7000 are widely discussed among the investor community, which can further heighten buyers’ confidence. He believes that the “animal spirits” filtering through today's market will likely drive stocks even higher once that level achieved, despite valuation worries.
From a fundamental perspective, the S&P trades at an earnings multiple of 23 times earnings, which is historically high. However, Demmert says most of that multiple is due to the overweight nature of the Mag 7 stocks that trade north of 35 times earnings.
“At 7000 the market multiple will be stretched even higher, closer to 24. Although this may concern investors at 7000, we believe that those concerns would be misguided since the average stock outside of the Mag 7 trades at just 17 times earnings,” Demmert said.
Given that investor cash levels are surprisingly higher than normal and investor sentiment is not significantly bullish, he expects 7000 to be followed by 7100 by the end of 2025 as investor FOMO drives stocks higher.
“We also expect S&P 500 8100 at the end of 2026, and given that this is an AI tech led business cycle, we anticipate that the S&P 500 will reach 15000 by 2030 and the Dow Jones Industrial Average will reach 100,000 by 2030,” Demmert said.
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