Wells Fargo has joined the ranks of bullish S&amp;P 500 forecasters for 2026, setting a projection that the benchmark could reach 7,400-7,600 next year―which would be a return of around 11% from present levels. ETF investors are taking notice, eyeing popular funds for potential gains.



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Darrell Cronk, president and CIO of the Wells Fargo Investment Institute, said in an address to the press, that the bank forecasts &#34;solid&#34; market returns next year due to consumer spending, investments in artificial intelligence, and possible deregulation, although the path will be bumpy.



And that’s projecting a cheery outlook for key ETFs tracking the S&amp;P 500, such as SPDR S&amp;P 500 ETF Trust (NYSE:SPY), Vanguard S&amp;P 500 ETF (NYSE:VOO), and iShares Core S&amp;P 500 ETF (NYSE:IVV).



Before stepping into 2025, analysts were nearly universally bullish. As of Dec 2, 2024, no bearish predictions were on record, per the Financial Samurai. Most firms forecast the S&amp;P 500 to end 2025 at or around 6,500, and so far, the index has crossed that threshold, with still a couple of weeks to end-year. 



That bullish outlook coincided with one of the S&amp;P 500’s most impressive stretches in modern history. The index is up 17% in 2025 so far, positioning it for a third straight year of double-digit gains after back-to-back rallies of more than 20% in 2023 and 2024. SPY, VOO, and IVV have all benefited from the rally, though flows tell a nuanced story: SPY lost about $4.8 billion, while VOO gained $122 billion and IVV added $30 billion, suggesting investors are migrating toward lower-cost, long-term S&amp;P vehicles even amid strong market sentiment. Yet, the strong market demand kept prices moving up.



The bullish forecast for 2026 should rub off on SPY, VOO and IVV alike, despite the micro-level disputes like fund flows.



For investors are looking for options aside from the big three, Invesco S&amp;P 500 Equall Weight ETF (NYSE:RSP) may perform well if laggards in the S&amp;P 500 portfolio catch up. Moreover, factor ETFs like State Street SPDR Portfolio S&amp;P 500 Growth ETF (NYSE:SPYG) and State Street SPDR Portfolio S&amp;P 500 Value ETF (NYSE:SPYV) offer exposure to different market drivers in a way that is tailored.



<h2>AI And Chip ETFs May Beat The Index</h2>



Wells Fargo also emphasized investment in AI as one of the top drivers for growth, and this makes thematic ETFs worthy of a revisit for 2026. Invesco QQQ Trust (NASDAQ:QQQ) tracks Nasdaq’s heavy technology orientation, thus experiencing the benefits from the mega-cap AI market leaders: Apple, Inc (NASDAQ:AAPL), Microsoft Corp (NASDAQ:MSFT), and Nvidia Corp (NASDAQ:NVDA). Semiconductor ETFs like the iShares PHLX Semiconductor ETF (NASDAQ:SOXX) and the VanEck Vectors Semiconductor ETF (NASDAQ:SMH) have the potential to make strong gains, since chips remain crucial to AI infrastructure. 



<h2>How To Strategize</h2>



However, thematic ETFs tend to be more volatile than broad-market funds. Pairing them with SPY, VOO, or IVV balances them out: broad ETFs are a stable core, while AI and chip funds become your high-octane growth supplement.



The 2025 and 2026 outlook keeps equities favored, even if volatility returns. For most investors, broad-market ETFs such as SPY, VOO, and IVV will remain the simplest, cost-effective way to participate in one of the strongest multi-year rallies in decades, while carefully layering in thematic exposure for additional growth potential.



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Image: Shutterstock

Wells Fargo forecasts the S&P 500 could reach 7,400-7,600 in 2026, suggesting potential gains for ETFs like SPY, VOO, and IVV. The bank cites consumer spending, AI investments, and possible deregulation as growth drivers. Despite fund flow shifts, these ETFs are expected to benefit from the bullish outlook. Thematic ETFs, particularly in AI and semiconductors, are also highlighted for growth potential, though they carry more volatility. Pairing them with broad-market ETFs is recommended for balanced investment strategies.

- Wells Fargo projects the S&P 500 could reach 7,400-7,600 in 2026, indicating an 11% return from current levels, driven by consumer spending and AI investments.  
- The index has risen 17% in 2025, benefiting ETFs like SPY, VOO, and IVV, although fund flows show a shift towards lower-cost options.  
- The outlook for 2026 suggests continued equity favorability, with thematic ETFs in AI and semiconductors offering additional growth potential alongside broad-market funds.

Why SPY, QQQ, SMH Could Be Big ETF Winners In 2026