No one is bearish! Wall Street unanimously expects U.S. stocks to continue rising in 2026, but veteran strategists are concerned about the consensus.

Wall Street has reached a rare optimistic consensus: U.S. stocks will rise for a fourth consecutive year in 2026, marking the longest streak of gains in nearly two decades.

On December 29, Bloomberg reported that after the S&P 500 Index rebounded about 90% from its October 2022 low, sell-side strategists have almost entirely abandoned bearish positions. According to a Bloomberg survey, none of the 21 market forecasters surveyed predict a decline in the stock market next year. On average, Wall Street’s forecasts suggest the S&P 500 Index will rise another 9% by 2026.

Although risks such as the AI bubble, Fed policy direction, and uncertainties surrounding a second Trump term remain unresolved, Wall Street strategists are collectively optimistic. If this consensus of extreme optimism comes true, U.S. stocks will see the longest annual rise cycle since the eve of the global financial crisis. If the most optimistic forecast materializes, the S&P 500 Index will see four consecutive years of double-digit returns for the first time since the dot-com bubble of the 1990s.

The report states that this synchronized optimism marks a complete shift by strategists after years of “failed forecasts.” Faced with the surprising resilience of the stock market during turbulence, previously bearish analysts (such as at JPMorgan) have been forced to continuously raise expectations to keep up with actual market performance.

It’s noteworthy that while no strategist predicts a major decline, some are still highlighting risks. Veteran market strategist Ed Yardeni expects the S&P 500 Index to close at 7,700 next year, up 11% from last Friday’s closing price. But even this long-term bull is uneasy about the lack of dissent: “Pessimists have been wrong for so long that people are tired of their rhetoric. But when everyone becomes optimistic, that actually makes me somewhat worried.”

Sell-Side Strategists Shift Entirely

The prolonged market rally has forced pessimists to “surrender,” with the sharp shift in JPMorgan’s stance being a typical example of this trend.

JPMorgan analysts were extremely bearish at the start of 2025, predicting at one point that the stock market would fall 12% that year, but this was proven misguided by the subsequent market rebound.

Now, JPMorgan has abandoned its cautious stance and predicts that the S&P 500 Index will climb to 7,500 in 2026, driven by strong corporate earnings and low interest rates.

JPMorgan’s Head of Global and European Equity Strategy Mislav Matejka said that optimism is also based on resilient growth, cooling inflation, and the surge in AI stocks reflecting underlying economic transformation, rather than a bubble about to burst.

“If the economy is weaker than we predict, the stock market may not view it negatively. The market will rely on the Fed to step up.”

Meanwhile, most strategists believe the fundamentals are enough to support the bull market’s extension.

Manish Kabra, Head of U.S. Equity Strategy at Societe Generale SA, points out that the macro environment remains solid. The U.S. economy expanded at its fastest pace in two years in the third quarter, thanks to resilient consumer and business spending. Additionally, Fed rate cuts and Trump’s tax cut plans are viewed as economic stimuli.

Manish Kabra stated:

"Just because the calendar changes doesn’t mean you have to change your view. The earnings outlook is strong, and growth is expanding from tech stocks to broader sectors."

Resilience After Turbulence

This broad bullish sentiment has been reinforced as the market has weathered intense volatility in 2025.

It is reported that in early 2025, the market was hit by sell-offs due to DeepSeek’s potential threat to U.S. AI companies and the chaotic trade war launched by Trump.

The S&P 500 Index tumbled nearly 20% from mid-February to early April, nearing bear market territory. At that time, strategists lowered expectations at the fastest pace since the pandemic crash.

However, the stock market soon mounted one of the quickest rebounds since the 1950s, forcing analysts to revise targets upward again.

Michael Kantrowitz, Chief Investment Strategist at Piper Sandler & Co., said uncertainty has been extremely high in the past five years, investors have become very short-term oriented and data-sensitive, and consensus views can shift with very few triggers. Given this uncertainty, he has stopped publishing year-end S&P 500 targets.

A Few Cautious Voices

Though no strategist predicts a major plunge, some still warn about risks.

Christopher Harvey at CIBC Capital Markets is one of the few strategists who remained bullish and was accurate amid 2025’s volatility. He expects the S&P 500 to end 2026 at 7,450 but also cautions the market may be overlooking several macro risks.

Harvey points to risks including: the Fed holding rates steady longer than traders expect; the U.S. potentially imposing tariffs on Canada or Mexico; and company executives possibly managing earnings expectations after a round of strong growth.

He believes these factors could begin to disrupt the market’s equilibrium.

Savita Subramanian at Bank of America is cautious due to high valuations, giving a target of 7,100.

Her forecast reflects huge uncertainty: If a recession occurs, stocks may plunge 20%, but if earnings far exceed expectations, stocks could soar 25%.

Risk Warning and DisclaimerThe market entails risks; investment requires caution. This article does not constitute personal investment advice and does not take into account each user’s specific investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article suit their particular circumstances. All investment based on this article is at the user’s own risk.