Stock market experts expect continued growth, bolstered by AI, in 2026
With only a few trading days left until the end of this year, 2025 looks set to be another hot year for stocks. The S&P 500 had returned more than 19% since Jan. 1 as of Monday’s market close. Barring a year-end disaster, this will be the third straight year of double-digit returns for investors in the U.S. stock market.
Of course, past performance is no guarantee of future results, and financial professionals are generally careful not to make wholesale changes to your strategy based on short-term stock market forecasts. But if you’re invested in the broad stock market, many investment analysts believe 2026 has the potential to be a great year for your portfolio.
“Certainly, we’re at a point where we’ve had incredibly strong performance from the U.S. equity markets over the last three years. We don’t think that means we can’t have another good year next year,” says Kristy Akullian, BlackRock’s head of iShares investment strategy for the Americas. “We’re still pretty optimistic in terms of our outlook on U.S. stocks. We’re pretty optimistic, relatively bullish.”
Wall Street expects corporate earnings to continue growing rapidly in 2026. On average, analysts expect companies in the S&P 500 to grow earnings by 15.5% next year, up from 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 ground. Analysts at Goldman Sachs expect: 2.6% growth in US gross domestic product and 2.8% growth in the global economy in 2026. That number is slightly higher than consensus estimates, but overall positive momentum in the economy next year is likely a good sign for stocks, said Ryan Detrick, chief market strategist at The Carson Group.
“We don’t see a recession next year,” he says. “And in the absence of a recession, the S&P 500 is up double digits, almost 70% of the time.”
In fact, the S&P 500 has posted calendar-year returns of 10% or more 68% of the time since 1950 and positive returns 86% of the time, according to the Carson Group.
Overall, Detrick expects the S&P 500 to post gains of 12% to 15% in 2026.
What do market forecasts mean for your portfolio in 2026?
A big factor that market forecasters factor into their assumptions is the continued spending on and adoption of AI technology.
“The ongoing wave of AI-driven physical investment is expected to be a powerful force reminiscent of past eras of massive capital expansion, such as the development of railroads in the mid-19th century and the rise of information and telecommunications in the late 1990s,” Vanguard analysts wrote in their 2026 outlook.
While markets are expecting a serious paradigm shift, you always face the risk of a pullback if progress stalls, says Jeffrey Buchbinder, chief equity strategist at LPL Financial.
“We argue that AI disappointment will be the No. 1 risk market of 2026,” he says. “This can take various forms. It may stem from doubts that there will be money to pay for it all, or concerns that it will not translate into data center construction that the market trusts.”
Buchbinder says markets could see a pullback regarding AI in 2026. Even considering this risk, he and others believe continued adoption of AI and the productivity it can bring will propel the economy and stock market higher in the coming year. Based on LPL’s 2026 “fair value” forecast for the S&P 500, analysts at the firm believe shares could rise 5.7% to 7.2% from current levels next year.
Analysts don’t expect AI to do all the heavy lifting in the stock market. Akullian says even non-AI stocks should benefit from more business-friendly tax laws and a Federal Reserve willing to continue cutting interest rates next year.
“I characterize our U.S. equity outlook as AI optimism combined with reasonable diversification,” he says.
Rather than trying to figure out where the winners will be or timing the market, Akullian says it’s smart to invest consistently and in a variety of assets. And in a year when the global economy could gain momentum, he says it might make sense to add some international visibility if your portfolio is heavily tilted toward U.S. stocks.
“Almost every investor we spoke to could probably benefit from the addition of some international allocations,” he says.
Detrick says no matter how optimistic you are about the economy, you should always be prepared for some volatility.
He recommends talking to a financial advisor before making any moves in your portfolio. Even if you manage your own investments, it’s important to have a plan for inevitable downturns in the market.
“As we move into next year, remember that markets will both rise and fall. There will be bad days. There will be scary headlines,” he says. “At some point this year, if stocks were down 10% to 15%, that would be perfectly reasonable and normal. And if you’re planning ahead for that, you probably won’t be making hasty decisions on your investments.”
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