One ASX share to buy today to ride the 30% forecast surge in the S&P 500

If these experts have it right, the S&P 500 is set to continue rewarding investors with outsized gains.

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If you follow global stock markets, you've likely had one eye on the S&P 500 Index (INDEXSP: .INX).

The index of the 500 largest US stocks had been on an absolute tear over the past 16 months.

As we saw with ASX shares, the S&P 500 began its recovery from a lengthy slide in mid-October 2022.

Since 14 October 2022, the US benchmark index has gained a whopping 40%.

Now ASX shares have done well over that period too. The S&P/ASX 200 Index (ASX: XJO) is up 15% since 21 October 2022 when the Aussie benchmark began its own recovery.

But, even taking into account the tax credits some ASX shares offer via franked dividends, the US market has clearly been a rewarding place for Aussies to invest some of their savings.

Over the past 12 months, for example, the S&P 500 has gained 25% compared to the 4% gain posted by the ASX 200.

And the analysts at Yardeni Research are forecasting that the benchmark US index could surge another 30% from current levels by the end of 2026.

Why the S&P 500 could keep charging higher

According to Yardeni Research (courtesy of The Australian Financial Review), the S&P 500 should hit 6,500 points in 2026. The index currently sits at 5,005 points.

That forecast is based on the analysts' earnings per share (eps) estimates, which look to be proving highly accurate for 2023.

"We are sticking with our S&P 500 earnings-per-share estimates of $US225 for 2023, $US250 for 2024, and $US270 for 2025. For 2026, we are now estimating $US300," Yardeni said.

The market research firm added:

Our US$225 earnings forecast for 2023 didn't change for over a year before 2023 arrived. At the end of 2022, it was among the most bullish projections out there. That's because we didn't expect a recession, as many other strategists and economists had projected.

They therefore predicted that 2023 earnings would fall between US$180 and US$200 per share. Looks like our 2023 forecast for earnings could be a near bullseye.

One ASX share to buy today for the forecast 30% surge

With 500 companies making up the S&P 500, the easiest way to tap into the forecast gains is via an exchange-traded fund (ETF).

For Aussie investors who prefer to stick to the ASX, I recommend having a look into the iShares S&P 500 ETF (ASX: IVV). The ETF aims to track the S&P 500. And it comes with low 0.03% annual fees.

As at 31 December, the ASX share was up 26% over 12 months and up 107% over five years.

The ETF currently holds 509 US-listed stocks, offering you broader diversity with a single ASX share investment.

The top three holdings of the ETF are Apple Inc (NASDAQ: AAPL), Nvidia Corporation (NASDAQ: NVDA) and Microsoft Corp (NASDAQ: MSFT).

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Apple, Nvidia, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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