What To Expect From The Stock Market In 2026 Forbes

Bonisiwe Shabane

-Dec 12, 2025, 9:36 AM

what to expect from the stock market in 2026 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 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? 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. Colin is an Associate Editor focused on tech and financial news. He has more than three years of experience editing, proofreading, and fact-checking content on current financial events and politics. He received his M.A.

in journalism from The New School and his B.A. in history and political science from McGill University. It was a rollercoaster of a year on Wall Street. Most experts think the ride isn't over. The S&P 500 is on track to post its third consecutive year of double-digit gains, putting the benchmark index up more than 90% since the current bull market started in October 2022. Strategists expect 2026 to be another good—if more modestly so—year for the stock market.

As of mid-December, the average 2026 year-end S&P 500 price target was 7,269, according to an LPL Financial analysis. That implies about 5% upside from Tuesday's record-high close. “We expect a continuation of the recent past, where returns are solid, driven by rising earnings growth,” wrote Vanguard analysts in the firm’s 2026 outlook. “But let us be clear: Risks are growing,” especially in the tech sector, they wrote. On January 2, 2020, I made the most prescient call of my 15-year career at Stansberry Research... At the time, stocks were regularly hitting new all-time highs, and many investors were convinced nothing could stop the mega-bull market.

That made it a great time to ponder the unthinkable... like something stopping the bull dead in its tracks. To help me get in the right frame of mind, I read President Herbert Hoover's diary of the Great Depression. I didn't sleep well the next few nights. You see, nearly a century ago, on the eve of the world's greatest financial calamity, investors were ignoring disturbing economic realities. As I put the pieces together and started thinking about the current situation, it suddenly became plain-as-day obvious that investors were once again making the same terrible mistake.

I published my thoughts and findings in the first Digest of 2020. Little did I know, the next "unthinkable" event was just a few weeks away... On February 11, 2020, the World Health Organization ("WHO") officially named the disease that would become a worldwide nemesis "COVID-19." Three weeks later, on March 13, the Trump administration declared a national emergency. 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. 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.

What To Expect From The Stock Market In 2026 Forbes

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