Bet on the bull market of US stocks continues! Predictions bet on S&P 500 to moderately rise by the end of the year, and Nasdaq 100 to rise by another 13%.

After the S&P 500 Index and the Nasdaq 100 Index both hit historical highs, market traders predict that the upward trend in the US stock market is likely to continue until the end of the year, but the gains will be relatively moderate. According to the latest data from the two major prediction platforms, Kalshi and Polymarket, the market's expectations for the performance of the US stock market by the end of the year show a complex sentiment of "moderate bullishness and cautious downside". S&P 500: Most likely to close in the range of 7800-8000 points The S&P 500 Index closed at 7353.29 points last Friday (June 26). According to Kalshi platform's prediction contract data, this benchmark index is most likely to close between 7800 and 8000 points by the end of 2026, meaning a rise of about 6% to 9% in the second half of the year. Specifically, the range of 7800 to 7999 points has the highest probability, at 14%. While the possibility of larger gains still exists, traders believe that the probability of the S&P 500 Index closing above 8200 points is only 11%, and the probability of closing above 9000 points is as low as 4%. At the same time, Kalshi data also warns investors of significant downside risks. The market generally believes that there is a 35% probability of the index falling below 6200 points by the end of the year, a drop of about 16% from the current level. Traders on the Polymarket platform also share a similar optimistic outlook. The platform currently predicts a 66% probability of the S&P 500 Index reaching 7800 points by December 31, a 36% probability of reaching 8200 points, and a 14% probability of surpassing 8600 points. This expectation is in line with the year-end target prices of mainstream Wall Street institutions. Citigroup has raised its 2026 S&P 500 Index target price from 7700 points to 8100 points; Wells Fargo has raised it to 7950 points; JPMorgan has raised its year-end target from 7600 points to 7800 points; Barclays has also raised its target price to 7800 points, and for the first time has given a forecast of 8800 points for 2027. Wolfe Research is also optimistic about the prospects of the US stock market in the second half of 2026, believing that falling oil prices, strong earnings growth, and continued growth in AI investments will support a further market rise. Nasdaq 100: Tech investors betting on an increase of over 13% Tech investors are showing more optimism. The Nasdaq 100 Index closed at 29118.24 points last Friday. The highest probability single outcome on the Kalshi platform is for the index to close above 33000 points, indicating a rise of over 13% from the current level. The implicit probability of this contract is 22%, much higher than any individual probability below that price range, indicating that traders still expect AI-driven leadership to drive up large tech stocks. However, tech stocks have recently experienced significant pullbacks. The Nasdaq Composite Index fell by about 5% last week, and AI trading faces increasing pressure. On June 26, the Nasdaq 100 Index fell by 1.09% in a single day, with semiconductor stocks experiencing concentrated selling. The Philadelphia Semiconductor Index has tumbled sharply and has entered a correction range from its highs. Reports of OpenAI delaying its IPO until next year have further shaken confidence in growth expectations in the AI sector. Capital flows: Tech funds experience record outflows While the medium-term outlook for tech stocks remains positive in the prediction market, short-term capital flows have sent warning signals. According to data from EPFR Global cited by Bank of America Securities, in the week ending June 24, US stock funds saw outflows of $8.5 billion, marking the first time in three months that investors have withdrawn capital from the US stock market. Among them, tech funds recorded a record outflow of $9.3 billion. In the previous week, US stock funds had net inflows of $119 billion, setting a historical record. Bank of America's chief equity strategist, Michael Hartnett, pointed out that this could indicate an upcoming "risk-off summer." Market funds are shifting from the "big seven tech giants" to AI infrastructure and small-cap stocks. The three major catalysts driving this rotation include: the Fed turning hawkish - the market is currently pricing in an 89% probability of at least one more rate hike by the end of the year; sticky inflation data weighing on risk appetite; and profit-taking in the semiconductor and AI sectors after a surge. Policy headwinds: Fed's hawkish stance suppresses upside potential The hawkish signals released by the Fed during the June FOMC meeting are a key factor suppressing market expectations of gains. The June meeting maintained the interest rate as expected by a vote of 12-0, but the dot plot showed half of the FOMC members supporting at least one rate hike by 2026. Fed officials raised their median forecast for the federal funds rate in 2026 from 3.4% in March to 3.8%. According to LSEG data, the market is currently pricing in a cumulative rate hike of about 41.2 basis points for 2026. Powell explicitly stated during the press conference that the Fed would not tolerate high inflation and removed forward guidance, emphasizing that the market should transition from "leaning on the Fed for the path" to "pricing based on economic data". However, Wolfe Research believes that although the Fed's current stance is hawkish, the fall in oil prices should help suppress inflation for the remaining time this year, and the Fed will ultimately maintain interest rates rather than start a sustained tightening cycle. Soochow also pointed out that the short-term factors supporting the economy are expected to gradually weaken after entering August and September, and the overly priced rate hike expectations in the current market may be revised. Overall outlook: Moderate bullishness is the consensus Overall, the prediction market and Wall Street institutions have formed relatively consistent expectations for the year-end performance of US stocks: the S&P 500 Index is expected to rise by 6% to 9% to close in the range of 7800 to 8000 points; while the Nasdaq 100 Index is expected to record even larger gains under the influence of AI. Supporting factors include: a decrease in oil prices easing inflation pressure; strong corporate earnings - JPMorgan has raised its 2026 S&P 500 EPS forecast to $350; continued growth in AI-related investments; and continued inflow of retail funds. Risk factors cannot be ignored: the Fed's rate hike expectations may further heat up; tech stock valuations are at historical highs; the potential for escalation of US-Iran tensions; and a possible acceleration of fund reshuffling once tech giants break support levels. As revealed by Kalshi's data: the market believes in an upward trend but not in a sudden surge; it is cautious about a decline but does not believe in an inevitable crash. With the Fed's policy path still unclear, "moderate bullishness" may be the most rational consensus at present.