S&P 500 Has Two-Thirds Chance to Surpass 8000 by Year-End, Kalshi Traders Predict

Traders on the prediction platform Kalshi estimate a roughly 66% probability that the S&P 500 will reach 8,000 points in 2026.

After a market pullback from late June through July, the AI sector has reignited, with the broad-based index surging over 5% in just four trading sessions, boosting the bullish outlook.

On Wednesday, the S&P 500 ended a four-day winning streak that had accumulated a gain of more than 5.5%. However, the index's string of record highs prompted prediction market participants to revise their target expectations upward.

Speculators on the Kalshi prediction platform now see a two-thirds chance that the S&P 500 will break through 8,000 this year. As of Wednesday's close, the index was roughly 3.6% away from that milestone. Kalshi offers contracts allowing traders to wager on whether the S&P 500 will hit various levels in 2026, with settlement determined by data from Google Finance.

Following a rebound from lows in April and May, which was influenced by US-Iran tensions, the S&P 500 entered a period of consolidation in late June and July as investors trimmed holdings in previously high-flying AI growth stocks. However, capital rotation into other sectors partially masked the underlying volatility within the market.

The recent four-day rally was fueled by multiple catalysts: easing US-Iran tensions in the Middle East, a strong earnings season, and the reallocation of capital triggered by the near-liquidation of Leopold Aschenbrenner's "Situational Awareness Fund." Most analysts do not view the June-July pullback as the end of the AI bull market but rather as a healthy correction, expecting the rally to regain upward momentum.

"Our investment thesis remains unchanged," wrote Keith Lerner, chief market strategist at Truist Wealth, in a Tuesday report. "Corporate earnings remain the key compass, with profit expectations being revised upward, the economy showing resilience, and market participation broadening. Typically, this environment does not correspond to the end of a bull market."

Bullish sentiment is intensifying. Kalshi traders estimate a one-in-three chance that the S&P 500 will hit 8,200 this year.