Big bank prophecies: The 2026 stock market calls that could make or break investors
Stock market forecast 2026: Wall Street is gearing up for what could be another strong year in the stock market as analysts from major banks release their 2026 predictions. After three consecutive years of a bull market, investors are keeping a close eye on forecasts that suggest US stocks could continue climbing, driven by expected Fed rate cuts, corporate earnings growth, and steady economic performance, as per a report.
S&P 500 Performance 2025 Amid Tech Volatility and AI Boom
Even with recent volatility in the tech sector, the S&P 500 remains firmly in bull market territory, up 17% so far this year and 79% since the end of 2022. Much of the momentum has been fueled by the AI boom, though concerns about high valuations and heavy AI spending among major tech firms have sparked discussions of a potential bubble, as per a Business Insider report. Despite this, top analysts believe there’s still room for growth in 2026.
Here’s a look at the major bank forecasts.
Bank of America’s 2026 Market Forecast: Modest Gains Ahead
S&P 500 target: 7,100 (+3% upside)
Insight: BofA expects S&P 500 earnings to grow 14% in 2026, which could lift the market. Factors like fewer stock buybacks and limited Fed cuts may temper gains.
JPMorgan Sees AI Investment and Fiscal Stimulus Driving Stocks
S&P 500 target: 7,500 (+9% upside)
Insight: The bank anticipates 13%-15% earnings growth, bolstered by AI investments, larger shareholder payouts, and fiscal stimulus from US president Donald Trump’s Big Beautiful Bill.
HSBC Predicts Broader AI Rally and Cyclical Stock Strength
S&P 500 target: 7,500 (+9% upside)
Insight: The AI rally is expected to broaden beyond the top tech giants. Solid US economic growth may also help cyclical stocks outperform.
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RBC Highlights Contrarian Buy Signal for Investors
S&P 500 target: 7,750 (+12% upside)
Insight: Investor sentiment points to a “contrarian buy signal.” RBC expects solid earnings growth and potential Fed rate cuts to support the market despite slower economic growth.
Morgan Stanley: Rolling Recovery Could Fuel Bull Market
S&P 500 target: 7,800 (+13% upside)
Insight: Analysts predict a “rolling recovery” in the economy, with different sectors rebounding at different times. Corporate earnings growth could fuel a new bull market, particularly in previously lagging areas.
Deutsche Bank Projects Mid-Teens Returns on Earnings Growth
S&P 500 target: 8,000 (+16% upside)
Insight: Expected earnings growth of 14%, along with higher payout ratios, fewer large earnings declines, and inflation below the long-term average, could push stock returns into the mid-teens.
FAQs
Will the bull market continue in 2026?
Most top banks are optimistic, expecting US stocks to keep climbing.
What’s Bank of America’s S&P 500 target for 2026?
7,100, reflecting modest upside of about 3%.