Between a historic stock market crash in April, the unprecedented rebound afterward, and literally everything going on in crypto, it feels more and more like nobody knows what will happen next.

But if anyone is going to try to predict the future, it’s Wall Street. Analysts are forecasting another year of stellar gains for equity investors as the Fed cuts rates, AI continues to buoy the market, and strong corporate earnings pave the way to dollar signs.

Then again, fears of an artificial intelligence bubble, tariffs going to the Supreme Court, and continued crypto volatility means that every forward-looking forecast should be taken with a grain of salt.

The most-bullish strategists on the Street hail from Oppenheimer, forecasting the S&P 500 rises to 8,100 by the end of this year, good for about an 18% gain from today’s prices. The most bearish, on the other hand, are the folks at Stifel Nicolaus & Co. who think the index finishes 2026 at 7,000—a mere 2% gain.

Here’s how a few of the major banks are looking at 2026, from bearish to bullish, along with some select commentary from analysts:

• Bank of America has an S&P 500 price target of 7,100 for year-end 2026, up 3.52% from current levels. “On AI, in our view, investors should get ready for an air pocket,” strategists wrote. “Monetization is to be determined, and power is the bottle neck and will take a while to build out. So for now, investors are buying the dream.”
• JPMorgan’s end-of-year price target is 7,500, up roughly 9.36%. “In 2026, style positioning will likely resemble 2025, with new extremes in crowding, record concentration and a “winner-takes-all” dynamic. Looking at the S&P 500, JP Morgan Global Research estimates the AI supercycle driving above-trend earnings growth of 13% to 15% for at least the next two years.”
• UBS’s price target for 2026 is 7,700, a 12.27% gain. “Bottom-up earnings estimates have continued to be revised higher, and we expect robust profit growth to remain a key driver of equity performance into the year ahead,” analysts wrote.
• Morgan Stanley’s price target is 7,800, up 13.74%. “US earnings and cash flow growth are poised to benefit from several factors, including a market-friendly policy mix, interest-rate cuts by the Federal Reserve, a reduction of $129 billion in corporate tax bills through 2026 and 2027 from the One Big Beautiful Act, positive operating leverage, the re-emergence of pricing power and AI-driven efficiency gains.”

It’s nice to have a roadmap like this, but if there’s one thing we learned from the rise of Labubu and Katy Perry going to space last year, it’s to always expect the unexpected.—LB

The S&P 500 has had a fantastic three-year stretch, returning 24.23% in 2023, 23.31% in 2024, and 16.39% in 2025. Wall Street unanimously believes the index can continue to rise next year—and that’s a problem.

As we noted above, #1 bull Oppenheimer says the S&P 500 will gain 18% by the end of next year, while the pessimists at Stifel Nicolaus & Co. say it will be more like a 2% gain. According to Bloomberg, the difference between the two—just 16%—is the narrowest gap between the most bullish and the most bearish analysts on Wall Street in recent years.

When all the big brains on the Street think the market will move one way, it can be a contrarian signal indicating that things are about to go the other way. All that optimism may already be baked into markets, leaving it with no margin for error, thereby amplifying market hiccups—and there could be plenty of those ahead, including slower-than-expected interest rate cuts, a worsening labor market, and any earnings misses from the leaders of the AI trade.

The aggregated consensus on Wall Street is that the S&P 500 will rise 11.4% in 2026. Four years in a row of double-digit gains would be great, but beware of too much bullishness.—MR

The tech sector has surged 300% over the past three years, and skepticism is mounting over whether Big Tech can continue to justify its sky-high valuations and massive AI spending. That’s why Wall Street strategists are increasingly encouraging investors to look beyond the Magnificent Seven and toward other parts of the market.

Many strategists expect this “great sector rotation” to take shape in 2026. Early signs of this shift are already emerging: stretched tech valuations are cooling investor appetite, and capital is flowing toward undervalued cyclicals, small-caps, and economically sensitive stocks as traders position for stronger growth this year.

Let’s take a closer look at some of those top sector picks:

Industrials

Industrial stocks face near-term pressure from a slowing US manufacturing sector and a soft housing market, which could weigh on demand for building products. But the outlook is far from bleak: heavy electrical equipment makers, such as producers of large gas turbines capable of powering data centers, stand to benefit from surging electricity needs driven by AI. Goldman Sachs expects a sharp rebound, forecasting industrial EPS growth to accelerate from 4% to 15% in 2026.

Power & Utilities

After decades of sluggish growth, US electricity demand broke out in 2025, exceeding the assumptions in many utility plans. AI training workloads and electrification in transportation and industry are driving the surge. Deloitte projects peak demand will rise roughly 26% by 2035, straining the grid—and giving power providers an excellent opportunity to profit.

Healthcare

Healthcare stocks were weighed down by policy uncertainty this year, particularly around the “most favored nation” drug pricing proposal. But recent agreements between Pfizer and the Trump administration have eased some of these fears and set a framework other companies may follow. As policy risks decline, sentiment and valuations have improved, helping healthcare become the best-performing sector in Q4 2025.

Earnings momentum is also improving: healthcare companies beat Q3 expectations by 13%, well above the market’s 7%, and the sector’s earnings revisions have stabilized for the first time in years. JPMorgan argues this sets up a more supportive backdrop for 2026 earnings growth.

Tech isn’t going anywhere, but the so-called boring sectors might be where the real action is this year.—SY