With just a few trading days left this year, 2025 looks to have been another hot year for stocks. The S&P 500 has returned more than 19% since Jan. 1 as of market close on Monday. Barring a year-end disaster, it will mark the third consecutive year of double-digit returns for investors in the broad U.S. stock market.
Of course, past performance is no guarantee of future results, and financial pros generally caution against making wholesale changes to your strategy based on short-term stock market prognostications. But if you’re invested in the broad stock market, many investment analysts believe that 2026 has the potential to be another great year for your portfolio.
“Certainly we’re at a point where we’ve had incredibly strong performance from U.S. equity markets over the last three years. We don’t think that that means that we can’t have another good year next year,” says Kristy Akullian, head of iShares investment strategy for the Americas at BlackRock. “We are still pretty optimistic in terms of our outlook for U.S. equities. We’re pretty upbeat, relatively bullish.”
Wall Street expects corporate earnings to continue to rapidly grow in 2026. On average, analysts expect companies in the S&P 500 to boost earnings by 15.5% next year, up from an estimated 13.2% in 2025 and 12.1% in 2024, according to data analytics firm LSEG.
Additionally, the U.S. and global economy appear to be on healthy footing. Analysts at Goldman Sachs expect 2.6% U.S. gross domestic product growth in 2026 and a 2.8% growth in the global economy. That’s slightly higher than consensus estimates, but generally, any positive momentum for the economy next year is probably a good sign for stocks, says Ryan Detrick, chief market strategist at The Carson Group.
“We simply don’t see a recession next year,” he says. “And when you don’t have a recession, the S&P 500 is up double-digits almost 70% of the time.”
Indeed, since 1950, the S&P 500 has posted calendar-year returns of 10% or more 68% of the time and a positive return 86% of the time, according to the Carson Group.
Overall, Detrick expects the S&P 500 to record gains of 12% to 15% in 2026.
What market projections mean for your portfolio in 2026
A huge factor that market prognosticators are baking into their assumptions is continued spending on and adoption of artificial intelligence technology.
“The ongoing wave of AI-driven physical investment is expected to be a powerful force, reminiscent of past periods of major capital expansion such as the development of railroads in the mid-19th century and the late-1990s information and telecommunications surge,” Vanguard analysts wrote in their 2026 outlook.
When markets are expecting a serious paradigm shift, you always run the risk of a pullback should progress stall, says Jeffrey Buchbinder, chief equity strategist at LPL Financial.
“We would argue that AI disappointment is the No. 1 risk market in 2026,” he says. “That could take several forms. It could come from doubts that money will be there to pay for all this or concerns that it will not translate into data center construction that the market seems to be counting on.”
Buchbinder says he could see an AI-related pullback rankling markets in 2026. Even with that risk in mind, he and others believe that continued AI adoption — and the productivity it may bring — should drive the economy and stock market upward in the coming year. Based on LPL’s 2026 “fair value” estimate for the S&P 500, analysts at the firm believe stocks could rise 5.7% to 7.2% from current levels next year.
Analysts don’t expect AI to do all of the heavy lifting in the stock market. Even non-AI stocks should benefit from more business-friendly tax laws and a Federal Reserve that’s willing to continue slashing interest rates next year, says Akullian.
“I would characterize our U.S. equity outlook as AI optimism paired with sensible diversification,” she says.
Rather than trying to figure out where the winners will be or timing the market, you’d be wise to invest consistently, and across a variety of assets, Akullian says. And in a year where the global economy could be picking up steam, it may make sense to add some international exposure if your portfolio is heavily tilted toward U.S. stocks, she says.
“Nearly every investor that we speak to could probably benefit from adding some international allocations,” she says.
No matter how optimistic you are about the economy, you should always be prepared for some volatility, says Detrick.
He recommends talking with a financial advisor before making any moves in your portfolio. Even if you’re managing your own investments, it’s important to have a plan for the market’s inevitable downturns.
“As we head into next year, just remember that markets go up and they go down. There are going to be bad days. There are going to be scary headlines,” he says. “At some point during this year, if stocks are down between 10% to 15%, that would be perfectly logical and normal. And if you’re planning ahead of time for it, you probably won’t make rash decisions with your investments.”
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