With only a few trading days left this year, 2025 looks set to be another hot year for the stock market. As of Monday’s market close, the S&P 500 had returned more than 19% since Jan. 1. Barring a year-end disaster, this would be the third consecutive year of double-digit returns for investors across the U.S. stock market.
Of course, past performance is no guarantee of future results, and financial experts generally caution against drastically changing strategies based on short-term predictions of the stock market. But if you’re invested in the stock market in general, many investment analysts think 2026 could be an even better year for your portfolio.
“Certainly, the performance of the U.S. stock market over the past three years has been incredibly strong. I don’t think that means next year can’t be a good year,” said Christy Akrian, head of investment strategy for iShares Americas at BlackRock. “We remain quite optimistic about the outlook for U.S. stocks. We are quite optimistic and relatively bullish.”
Wall Street expects corporate earnings to continue growing rapidly in 2026. On average, analysts expect S&P 500 companies’ revenues to grow 15.5% next year, higher than estimates of 13.2% in 2025 and 12.1% in 2024, according to data analysis firm LSEG.
Additionally, the U.S. and global economies appear to be in good shape. Analysts at Goldman Sachs expect the U.S. gross domestic product (GDP) to grow by 2.6% in 2026, and the global economy to grow by 2.8%. Ryan Detrick, chief market strategist at Carson Group, said this is slightly higher than consensus expectations, but generally positive economic momentum next year probably bodes well for stocks.
“There’s no way we’re going to have a recession next year,” he says. “And, absent a recession, the S&P 500 will rise by double digits almost 70% of the time.”
In fact, since 1950, the S&P 500 index has posted a calendar year return 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 index to post gains of 12% to 15% in 2026.
What 2026 Market Forecasts Mean for Your Portfolio
A big factor in making market forecasters stick with their assumptions is the continued spending and deployment of artificial intelligence technology.
“The continued 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 explosion of information and communications in the late 1990s,” Vanguard analysts wrote in their 2026 outlook.
When markets anticipate a profound paradigm shift, there’s always a risk of a pullback if progress stalls, said Jeffrey Bachbinder, chief equity strategist at LPL Financial.
“We argue that AI disappointment will be the biggest risk market in 2026,” he says. “That could take several forms. It could stem from doubts about whether there will be money to pay for all of this, or concerns that it won’t lead to data center construction as the market seems to expect.”
Buchbinder said an AI-related backlash could shake up the market in 2026. Even with that risk in mind, he and others believe the continued adoption of AI and the productivity it brings should lift the economy and stock market next year. Based on LPL’s 2026 “fair value” estimate for the S&P 500, the company’s analysts expect the stock 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. Even non-AI stocks should benefit from a more business-friendly tax code and a Federal Reserve willing to continue cutting interest rates next year, Akrian said.
“Our outlook for US stocks can be characterized as a combination of AI optimism and prudent diversification,” she says.
Rather than trying to spot the winners or try to time the market, it’s wise to invest consistently across a variety of assets, Akrian says. And in a year when the global economy could pick up steam, adding international exposure may make sense if your portfolio is heavily tilted toward U.S. stocks, she says.
“Almost every investor we talk to could probably benefit from adding international allocation,” she says.
No matter how optimistic you are about the economy, you should always be prepared for some volatility, Detrick says.
He recommends consulting a financial advisor before making any changes to your portfolio. Even if you manage your own investments, it’s important to plan for the inevitable market downturns.
“Looking ahead to next year, remember that markets will go up and down. There will be bad days. There will be scary headlines,” he says. “If stocks were to drop 10% to 15% at some point this year, that would be perfectly logical and normal. And if you planned ahead, you probably wouldn’t make rash decisions about your investments.”
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