Market participants polled in the past week expect the S&P 500 to climb roughly 10% from current levels to about 7,500 by the end of 2026, reflecting a median view among 44 strategists, analysts and portfolio managers. The index finished Monday at 6,837.75, and the median forecast represents about a 9.7% increase from that close.
Outlook and underlying drivers
Respondents pointed to solid corporate earnings and continued economic growth as the core foundations for the projected advance. One strategist noted the difficulty in identifying clear, widespread weakness in the market at present, arguing that earnings and broader economic expectations underpin a constructive view for equities.
That optimism, however, sits alongside a number of market frictions. A commonly cited worry is a "lingering concern around inflation, and what that means for the Fed." The Federal Reserve held interest rates steady last month, citing reduced risks to both inflation and employment. Market pricing currently implies traders expect at least a one-quarter percentage point rate cut by about mid-year.
Sentiment on corrections and valuation
Sentiment is not uniformly bullish. In an additional question in the poll, nine of 13 respondents said an S&P 500 correction in the next three months was likely. Some strategists regard such a pullback as healthy for the market. One portfolio manager said a correction would be stabilizing and reiterated a year-end target slightly above the median, at 7,650, or roughly a 12% gain from current levels.
Valuation metrics provide some context: the S&P 500 is trading at a forward price-to-earnings ratio of 21.6 times, down from 22.5 at the start of the year, according to LSEG data cited by respondents.
Technology, AI disruption and earnings expectations
Technology remains central to the outlook. After a strong 2025 in which the S&P 500 rose about 16%, the market has been more range-bound through the first two months of 2026. Investors have been quick to sell stocks viewed as vulnerable to disruption from artificial intelligence, particularly within software. Those software shares have fallen roughly 23% since December 31, according to the poll summary.
Some market professionals expect AI-exposed names to remain out of favor for much of the year, although at least one observer suggested that their discounted prices will eventually draw investors back into the sector. Analysts still project strong earnings expansion for technology, with anticipated sector growth of about 33% in 2026. At the index level, S&P 500 earnings growth is forecast at 14.8% for 2026, compared with 14.4% for 2025, based on LSEG estimates.
One strategist emphasized that, overall, technology should prove profitable and provide support to the broader market, even if short-term volatility persists.
Trade policy, tariffs and geopolitical risks
Political and geopolitical developments are additional sources of uncertainty. Strategists highlighted recent statements and actions on trade policy as creating market ambiguity. The U.S. Supreme Court ruled that the president exceeded authority by enacting reciprocal tariffs under an economic emergency law. Following that decision, the president implemented a temporary 10% tariff on all foreign imports, with a stated threat to raise it to 15%. The temporary tariff would require Congressional approval to be extended beyond 150 days.
Separately, tensions between the United States and Iran were flagged as a potential catalyst for higher oil prices, which could feed through to inflation and pose risks for interest rate policy and equity valuations.
Other indices and closing figures
The poll also produced a median target for the Dow Jones Industrial Average of 52,000 for the year-end. The Dow closed Monday at 48,804.06.
Should the S&P 500 finish 2026 above the current level, it would represent the fourth consecutive year of gains for the index, assuming projections materialize.