Stocks are poised for another double-digit gain in 2026, as indicated by Wall Street’s leading strategists. Confidence remains high that the bull market can extend into the next year, although expectations suggest that the momentum may not be as robust as in previous years. According to the 2026 CNBC Market Strategist Survey, strategists forecast an average end-of-year target for the S&P 500 at 7,629, which reflects an anticipated upside of 11.6% from current levels. The median target is slightly higher, at 7,650, representing a nearly 13% increase. These projections indicate a more optimistic outlook compared to previous estimates.
As the year comes to a close, the S&P 500 is on track for a remarkable “three-peat,” having already surged 24% in 2023 and 23% in 2024. The index has continued its winning streak into 2025, climbing by more than 15% and achieving all-time highs despite ongoing concerns about tariffs and a potential AI bubble. The index’s recent close above 6,900 marks a significant milestone in this upward trend. Fundstrat’s head of research, Tom Lee, emphasized that the “Wall of Worry” continues to support the bull market narrative.
While there are undeniable challenges ahead, many strategists maintain that equities will thrive due to a promising combination of factors. For 2026, the Federal Reserve is anticipated to further ease monetary policy, contributing to a favorable economic environment. Additionally, the Trump administration’s proposed One Big Beautiful Bill Act aims to invigorate an economy that has shown signs of slowing down. Tariff concerns may diminish, allowing businesses to operate with greater confidence.
In terms of technological advancement, Wall Street sees artificial intelligence playing a crucial role in market performance. The expectation is that the benefits stemming from AI will become increasingly apparent, leading to earnings growth that aligns with high valuations in the tech sector. Analysts predict that AI could enhance overall earnings growth by 0.4% in 2026 and 1.5% in 2027, as corporate investments in this technology expand.
Despite these optimistic projections, potential pitfalls remain. 2026 coincides with a midterm election year, traditionally linked to market volatility. The labor market’s performance will be under scrutiny for signs of weakness, and the ability of AI-related investments to justify current high valuations is uncertain. Sam Stovall, chief investment strategist at CFRA Research, noted that while the outlook remains generally positive, increased volatility and lower-than-average gains could be expected.
Outlook targets from leading strategists further illustrate a spectrum of predictions. Oppenheimer’s John Stoltzfus leads the pack with an optimistic forecast of 8,100 for the S&P 500, claiming that stocks remain his favored investment vehicle. Deutsche Bank’s Binky Chadha has paired his more moderate estimate at 8,000, while Morgan Stanley’s Mike Wilson also anticipates growth to 7,800, spurred by investments in AI.
On the other hand, Bank of America Securities’ Savita Subramanian presents a more cautious stance, pegging her year-end target at 7,100, the lowest in the survey. She raised concerns about the labor market’s potential decline and the associated effects on consumer spending, pointing to a looming risk of significant multiple compression. Her analysis suggests that a shaky mid-tier income segment will impact broader consumer resilience.
Given the landscape, Subramanian also advises a more selective investment approach. Although she forecasts a possible peak at 8,000, her bear case sees the index potentially falling to 5,500, which would constitute a nearly 20% decline. In contrast, her bull case suggests a high of 8,500.
Overall, strategists concur that the coming year will necessitate a discerning investment strategy. With projected volatility, there may be a stronger inclination toward high-quality stocks, particularly in the tech sector. Investors are encouraged to stay engaged while also being vigilant in navigating a more complex market environment. As the new year approaches, a careful selection of investments will be crucial for capitalizing on potential growth opportunities.
