Overview
- The Dow, S&P 500 and Nasdaq gained roughly 14%, 16% and 20% year to date as of Dec. 19.
- The rally has been tied to enthusiasm for artificial intelligence and quantum computing plus expectations of additional Federal Reserve rate cuts.
- Fourteen Wall Street forecasts peg the S&P 500 between 7,100 and 8,100 in 2026, reflecting broad optimism.
- The Motley Fool contends that two historically reliable indicators flag elevated downside risk in 2026, highlighting the Shiller CAPE near 40 and another long-term gauge.
- The analysis notes that such signals do not guarantee outcomes, and recent years have shown bull markets punctuated by brief policy-driven selloffs such as the early-April 2025 tariff shock.