The end of the year is quickly approaching, and that means one thing on Wall Street. That means strategists will compete to announce their stock market outlook for 2026. Some shops are already hinting at next year’s developments. Morgan Stanley, for example, expects the S&P 500 index to reach 7,800 over the next 12 months. This is about 16% higher than Friday’s closing price of 6,734.11. “Key drivers of our bullish earnings and cash flow outlook include a return to positive operating leverage, increased pricing power, improved efficiency from AI, accommodative tax and regulatory policies that facilitate the public-to-private growth transition, and subdued interest rates across the curve,” strategist Michael Wilson said in the investment bank’s 2026 Global Strategic Outlook Note published on Sunday. Wilson called for the S&P 500 to end at 6,500 by 2025. The benchmark is 3% above that mark. .SPX YTD Mountain SPX Year to date Sam Stovall of CFRA also expects stock prices to rise significantly next year. “The S&P 500 index target for the end of 2026 is set at 7,400,” he said in a note last week. The target suggests an upside of nearly 10% from Friday’s closing price. “We see the bull market continuing, but at a slower pace as headwinds strengthen. In particular, years in which the mid-term election (MTEY) wave could break (i.e., the president and the House and Senate are the same party) have proven to be very difficult in terms of volatility and price returns, with an average of 4 Senate seats and 27 House seats changing hands across all MTEYs since 1946,” he said. he said. Stovall’s 2025 target of $6,525 is also lower than the S&P 500’s stock price on Monday morning. These are just some of the predictions for next year. Other research firms and banks are expected to issue their outlooks in the coming weeks.
