Overview
- U.S. stocks finished 2025 with a third consecutive double‑digit advance, extending the bull market that began in October 2022.
- Forecasts for 2026 diverge, with CFRA’s Sam Stovall targeting S&P 7,400 (about a 7% rise) and Deutsche Bank projecting 8,000 (roughly 16% upside).
- LSEG estimates S&P 500 earnings will grow by more than 15% in 2026, a level seen as critical given already elevated valuations.
- Market leadership remains concentrated, though LSEG expects the Magnificent Seven to post 23% earnings growth versus 13% for the rest of the index, pointing to some broadening.
- Key swing factors include the Fed maintaining a dovish stance with at least two 2026 cuts priced, follow‑through on AI capex, potential U.S.–China trade flareups, a fragile labor market, and historically softer midterm‑year returns.