Wall Street Turns Bullish as Analysts Forecast Continued Stock Rally

Across Wall Street from global banking giants to niche investment boutiques a broadly bullish view has taken root: US equities are expected to climb again in 2026, extending the market’s winning streak to four consecutive years. If that plays out, it would mark the longest run of annual gains in nearly 20 years.

‍

That confidence persists despite widespread unease about what could derail the rally that has lifted the S&P 500 roughly 90% since its October 2022 trough. Investors continue to worry that enthusiasm around artificial intelligence could cool abruptly, that economic growth or Federal Reserve policy could surprise to the downside, or that President Donald Trump’s second year in office could deliver fresh political and trade-related shocks.

‍

Still, after three years in which bearish forecasts consistently missed the mark, sell-side strategists are overwhelmingly optimistic. According to a Bloomberg News survey, the average year-end target for the S&P 500 suggests another gain of about 9% in 2026. Notably, none of the 21 strategists surveyed is calling for a market decline.

‍

Veteran bull Ed Yardeni says persistent market strength has worn down skeptics. He expects the S&P 500 to end 2026 near 7,700 roughly 11% above Friday’s close though even he admits the lack of dissent gives him pause.

‍

“When pessimism disappears entirely, that’s when my contrarian instincts kick in,” Yardeni said, noting that sentiment has swung decisively toward optimism. “Right now, negativity is clearly out of fashion.”

‍

This upbeat outlook was tested repeatedly during a turbulent year. Early 2025 selloffs sparked by concerns over DeepSeek’s potential threat to US AI leaders and renewed volatility tied to Trump’s trade policies briefly put bullish projections at risk.

‍

As the S&P 500 slid nearly 20% from mid-February through early April, approaching bear-market territory, strategists cut forecasts at the fastest pace since the Covid-era crash. Yet those reductions proved short-lived. Stocks rebounded sharply, delivering one of the fastest recoveries since the 1950s and forcing forecasters to raise targets once again.

‍

The episode underscored how difficult forecasting has become in the post-pandemic era. Despite higher interest rates and aggressive trade policies aimed at reversing decades of globalization, the US economy has remained surprisingly durable. At the same time, massive capital spending on artificial intelligence particularly data centers and advanced semiconductors has continued to propel the tech megacaps, which accounted for nearly half of the S&P 500’s gains this year.

‍

Michael Kantrowitz, chief investment strategist at Piper Sandler, says the past several years have been defined by heightened uncertainty. That environment, he argues, has made investors overly sensitive to short-term data shifts. Kantrowitz ultimately abandoned publishing year-end S&P targets altogether.

‍

“When uncertainty is this elevated, sentiment can flip very quickly,” he said. “It doesn’t take much to change the prevailing narrative.”

‍

If Wall Street’s 2026 forecasts prove accurate, the market would be on track for its longest stretch of annual gains since the years preceding the Global Financial Crisis. Some of the most aggressive targets would also mark the first time since the dot-com era that the S&P 500 posts four straight years of double-digit returns.

‍

Christopher Harvey of CIBC Capital Markets stands out as one of the few strategists who stayed confident throughout this year’s volatility. After moving from Wells Fargo Securities, he maintained his call that the index would finish near 7,007 a prediction that came within 1% of the S&P’s Friday close around 6,930.

‍

Looking ahead, Harvey expects the benchmark to reach 7,450 by the end of 2026, implying an 8% advance. Still, he cautions that investors may be underestimating several macroeconomic risks, including the possibility that the Fed keeps rates higher for longer, escalating tariff tensions with Canada or Mexico, or corporate leaders tempering earnings guidance after a strong run.

‍

“Any one of those factors could disrupt the current momentum,” Harvey warned.

‍

JPMorgan Chase offers a clear example of how quickly sentiment has shifted. The bank was caught off guard by early-2025 market turmoil and turned sharply bearish by April, projecting a 12% drop in the S&P 500 for the year the most negative call among major strategists tracked by Bloomberg.

‍

By June, JPMorgan reversed course, forecasting modest gains. Even that proved too cautious, as the index went on to rally nearly 18% in 2025. For 2026, the bank has fully embraced a bullish stance, targeting 7,500 for the S&P 500, driven by strong earnings growth and easing interest rates.

‍

Mislav Matejka, JPMorgan’s head of global and European equity strategy, says optimism is supported by steady economic growth, cooling inflation, and confidence that the AI boom represents a structural shift rather than a speculative bubble.

‍

“If growth disappoints, markets may still respond positively,” he said. “Investors would likely look to the Fed to provide support.”

‍

Not everyone is fully on board. Bank of America strategist Savita Subramanian is among the few urging restraint, citing elevated valuations. She sees the S&P 500 reaching 7,100 in 2026 but outlines a wide range of outcomes. In a recession, she warns stocks could fall 20%, while upside earnings surprises could fuel gains of as much as 25%.

‍

For now, most strategists appear guided by a hard-earned lesson: betting against the US stock market has been costly. Recent data support that view. The US economy grew at its fastest pace in two years during the third quarter, powered by resilient consumer demand, steady business investment, and calmer trade dynamics. Corporate profits are also expected to deliver another year of double-digit growth.

‍

“You don’t reset your outlook just because the calendar changes,” said Manish Kabra, head of US equity strategy at Societe Generale. He pointed to broadening profit growth beyond technology, added stimulus from Fed rate cuts, and Trump’s tax legislation as reinforcing factors.

‍

“The macro backdrop remains fundamentally strong,” Kabra said. “That’s hard to ignore.”

‍