1 Vanguard Index Fund to Buy Before It Soars in 2026, According to a Wall Street Analyst
Key Points
Julian Emanuel at Evercore sees a bull-case scenario in which the S&P 500 hits 9,000 this year; that implies 20% upside from its current level of 7,520.
Emanuel's forecast assumes investors will move cash from money market funds into the stock market because the odds of interest rate hikes have diminished.
The Vanguard S&P 500 ETF provides exposure to many of the most influential stocks in the world, and the benchmark index has gained 14% annually over the last 15 years.
- 10 stocks we like better than S&P 500 Index ›
The S&P 500 (SNPINDEX: ^GSPC) is on pace for its fourth consecutive year of double-digit gains. The index has advanced 11% to 7,575 in 2026.
Analysts at Oppenheimer and Citigroup expect the S&P 500 to top 8,000 this year. But Julian Emanuel, chief equity strategist at Evercore, says the index could move even higher. His bull-case target of 9,000 implies 19% upside from its current level.
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Investors who want exposure to the S&P 500 have several good options. My favorite is the Vanguard S&P 500 ETF (NYSEMKT: VOO) due to its low expense ratio. Here are the important details.
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Evercore's Julian Emanuel says the S&P 500 could hit 9,000 in 2026
Julian Emanuel's base-case target says the S&P 500 will hit 7,750 in 2026. But he recently told CNBC that his bull-case target of 9,000 has become more likely since oil prices have dropped sharply and S&P 500 companies are on pace to report their fastest earnings growth since 2021.
Brent crude oil (an international benchmark) hit $124 per barrel in May, the highest level since the summer of 2022. In turn, Consumer Price Index (CPI) inflation increased to a three-year high of 4.2% in May, and the Federal Reserve became far more hawkish in its outlook. Nine of 18 Federal Open Market Committee (FOMC) members signaled at least one interest rate hike in 2026 at the June meeting, up from zero in March.
However, Brent crude has fallen about 40% to $75 per barrel since the FOMC made those projections, putting downward pressure on energy prices. Emanuel expects that trend to continue. "We are in the peak of inflation, and it is likely to cool down over the rest of the year," he told CNBC. For that reason, Emanuel believes the Fed will hold rates steady rather than hike them in the remaining months of 2026.
So what? Investors have $8 trillion in money market funds, according to Emanuel. Those investment vehicles were attractive when oil prices were increasing, as money market funds pay more when interest rates rise. But Emanuel argues that, because rate hikes are now unlikely, investors will move that cash into stocks, especially artificial intelligence (AI) stocks.
Here's the big picture: Emanuel sees a bull-case scenario in which cooling inflation keeps the Federal Reserve on hold, meaning interest rates remain unchanged through the end of the year. Meanwhile, strong corporate earnings driven by AI spending will pull capital that had been parked in money market funds back into stocks. That could push the S&P 500 to 9,000 by year's end.
The Vanguard S&P 500 ETF tracks many of the world's most influential stocks
The Vanguard S&P 500 ETF (exchange-traded fund) measures the performance of the S&P 500, which tracks 500 large U.S. companies. It covers about 80% of domestic equities and 40% of global equities by market value, meaning it covers many of the most influential stocks in the world. The index fund has a very low expense ratio of 0.03%.
The top 10 holdings in the Vanguard S&P 500 ETF are listed below:
- Nvidia: 7.9%
- Apple: 7.1%
- Microsoft: 5.1%
- Alphabet: 6.1%
- Amazon: 4.1%
- Broadcom: 3.3%
- Meta Platforms: 2.1%
- Tesla: 1.9%
- Micron: 1.7%
- Eli Lilly: 1.4%
Even if the S&P 500 falls short of 9,000 in 2026, there are still good reasons to own an S&P 500 index fund.
The S&P 500 returned 633% (14% annually) during the last 15 years. Earning better returns is very difficult. So hard, in fact, that even professional money managers tend to come up short. Only 10% of large-cap funds beat the S&P 500 during the last 15 years, according to S&P Global.
Beyond that, the S&P 500 has been a consistent moneymaker over long periods. The odds of a positive return in the S&P 500 on any given day are about 50-50, but history says investors who buy and hold an S&P 500 index fund for 15 years are virtually guaranteed to profit. The S&P 500 has never declined over any 15-year period in history.
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Citigroup is an advertising partner of Motley Fool Money. Trevor Jennewine has positions in Amazon, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Broadcom, Eli Lilly, Evercore, Meta Platforms, Micron Technology, Microsoft, Nvidia, S&P Global, Tesla, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
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