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Stock Market Outlook 2026 What Investors Can Expect In The Forbes

Bonisiwe Shabane
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stock market outlook 2026 what investors can expect in the forbes

Hello, and welcome to Forbes Advisor’s Weekly Brief, where we dive into the realities of consumer finance and empower you with knowledge to help make your journey to your financial goals easier. While names like Nvidia may just seem like alphabet soup, that AI stock now holds the highest weight in the S&P 500. In fact, Nvidia’s weight in the index jumped from a tiny fraction (0.9) in 2020 to over 7% at the end of November 2025. Ahem ... and 7% is the highest in the benchmark. Its ranking now competes with Apple, Microsoft and Amazon.

So, what can we expect from the stock market in 2026? And how accurate are these stock market predictions? In this week's edition, we're going to focus on investing themes, the economy and what it could mean for the year ahead. Let’s read the tea leaves and see what investment managers say is in store for 2026. Managing Editor, Investing at Forbes Advisor The stock market enters the new year with enough momentum to make it a fourth-straight winning season, but is it too weary to make it happen?

(© Gary Neill) With a third straight year of double-digit gains almost assured for 2025, the stock market enters the new year with enough momentum to make it a fourth-straight winning season. The favorable stock market forecast for 2026 rests on many supports: rising corporate profits, tax stimulus, a dovish Federal Reserve, investments in artificial intelligence and even some history. Yes, caveats remain,… Get instant access to exclusive stock lists, expert market analysis and powerful tools with 2 months of IBD Digital for only $20! Get market updates, educational videos, webinars, and stock analysis.

Learn how you can make more money with IBD's investing tools, top-performing stock lists, and educational content. Goldman Sachs Research economists expect sturdy global growth of 2.8% in 2026, versus a consensus forecast of 2.5%. The US is likely to outperform substantially (2.6% vs. 2.0%) because of reduced tariff drag, tax cuts, and easier financial conditions. Sturdy global growth coupled with non-recessionary Fed cuts should be positive for global equities, but tensions with 'hot valuations' may increase volatility. Goldman Sachs Research analysts remain constructive on equities for 2026 as earnings continue to grow, but forecast lower index returns than in 2025, amid a broadening bull market.

The US-China AI and geopolitical power race and global energy supply waves drive our analysts' key convictions. Goldman Sachs Research's cyclical macro base case of sturdy global GDP growth and 50 basis points of Fed rate cuts in 2026 is again supportive of top-down commodity returns. Our signature newsletter with insights and analysis from across the firm At Morgan Stanley, we lead with exceptional ideas. Across all our businesses, we offer keen insight on today's most critical issues. Learn from our industry leaders about how to manage your wealth and help meet your personal financial goals.

At Morgan Stanley, we lead with exceptional ideas. Across all our businesses, we offer keen insight on today's most critical issues. From volatility and geopolitics to economic trends and investment outlooks, stay informed on the key developments shaping today's markets. At Morgan Stanley, we lead with exceptional ideas. Across all our businesses, we offer keen insight on today's most critical issues. Updated on: December 18, 2025 / 11:07 AM EST / CBS News

The U.S. stock market scaled new heights in 2025, as investors largely tuned out concerns about the Trump administration's sharply higher tariffs and shrugged off fears of a financial market bubble among artificial intelligence companies. The S&P 500 stock index is up roughly 15% this year through Dec. 17— a strong performance, although lower than the heady 23% jump posted by the broad-based index in 2024. The S&P 500 has climbed an average of 13% per year over the last decade, according to Mark Luschini, chief investment strategist at wealth management firm Janney Montgomery Scott. The Nasdaq Composite, which includes tech heavy-hitters such as Alphabet, Microsoft and Nvidia, has climbed more than 18% this year, while the blue-chip Dow Jones Industrial Average is up more than 13%.

The key question: Will such investor exuberance spill over into 2026, especially as concerns about an AI bubble percolate? As 2025 comes to an end, the economy seems stable, the S&P 500 is up more than 15% so far this year, and inflation is relatively tame. Yet Americans have the kind of gloomy views about inflation, politics, and the job market that are normally only seen during recessions. It’s a good reminder that there can be a disconnect between the big picture and individual American wallets. But with most strategists forecasting more of the same for 2026, it’s also an opportunity to dig into the large-scale drivers of what’s expected to be a relatively healthy economy and stock market. "We are constructive on 2026," said Rob Haworth, senior investment strategy director for U.S.

Bank. "There are risks we have to watch, but we think that this is a market and an economy that can repeat the successes we've seen over the last couple of years." Most analysts do expect the stock market to perform well next year, bolstered by spending on artificial intelligence technology, Federal Reserve rate cuts, and tax breaks. Strategists at Deutsche Bank expect the S&P 500 to end 2026 at 8,000, which would mean a nearly 18% increase over the index’s closing level of about 6,737 on Dec. 17. Investment bank Morgan Stanley sees a 14% increase.

LPL Financial’s forecast of a level between 7,300 and 7,400 translates to only about an 8% increase. Capital Group Global High Income Opportunities Fund (LUX) Capital Group Multi-Sector Income Fund (LUX) Capital Group Emerging Market Debt Fund (LUX) Has the AI boom reached bubble territory? Have markets overcome the risks of policy uncertainty?

Can markets outside the US continue to show strength, or will the global rally fade as it has many times in the past? These questions sit front and centre for investors heading into 2026. Certainly, risks are ever-present: Valuations for many types of stocks are sky-high, government debt is soaring and inflation remains sticky. That said, a more stable economic backdrop bodes well for equities in 2026. And markets are broadening, as compelling opportunities expand beyond the Magnificent Seven (Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA and Tesla) across geographies, industries and market capitalisations.

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