Wall Street's 2026 Market Forecasts Point to Continued Bull Market: S&P 500 Set for New Highs

The investment banking community is painting an optimistic picture for US equities in the coming year. Major financial institutions have unveiled their market forecasts for 2026, revealing broad consensus that the bull market momentum shows no signs of stopping. As artificial intelligence continues to drive economic transformation, strategists across Wall Street are competing to set increasingly bullish targets for the S&P 500 Index.

Consensus Takes Shape: The Bull Market Thesis

Industry-wide market forecasts from top-tier banks suggest there’s considerable upside ahead. The baseline scenario cuts across multiple projections: the S&P 500 Index is expected to reach at least 7,500 points by year-end 2026, with several institutions pushing targets significantly higher. This consensus reflects confidence that the current rally is not merely a cyclical bounce but the beginning of a sustained advance.

JPMorgan’s baseline case mirrors this view, forecasting the index will settle at 7,500 points in 2026. However, the bank suggests there’s room for even greater gains—if inflation moderates more than expected and triggers more aggressive Federal Reserve rate cuts, a break above 8,000 points becomes plausible under their bull case scenario.

Individual Institution Predictions: A Hierarchy of Optimism

The specific market forecasts from major Wall Street players reveal varying degrees of confidence. Deutsche Bank has staked out the most aggressive position, setting an 8,000-point target for the S&P 500 by the end of 2026. Morgan Stanley’s strategist Mike Wilson characterizes next year as a potential “new bull market,” with the bank projecting index strength that would close the year at 7,800 points. HSBC has calibrated its market forecasts at the more modest 7,500-point level, positioning itself with the consensus baseline.

The Fundamental Case: Why Bulls Remain Convinced

These optimistic market forecasts rest on several pillars. Morgan Stanley’s research team contends that the rolling recession that dominated concerns earlier in 2025 has already concluded. Moving forward, policy support and corporate earnings strength are expected to remain constructive through 2026, providing the earnings lift necessary to push equity multiples higher.

JPMorgan adds another dimension to the bull case: the bank currently expects the Federal Reserve to execute two more rate cuts before pausing its easing cycle. This moderate reduction in borrowing costs should sustain economic momentum without triggering excessive inflation that might derail the equity advance.

Risk Factors in the Forecasts

While these market forecasts skew decidedly bullish, the institutions acknowledge conditional factors. JPMorgan explicitly notes that its 8,000-point bull case hinges on inflation improving faster than the baseline expectation. Conversely, if inflation remains sticky or reaccelerates, upside targets could prove too optimistic.

The consistency of market forecasts across competing institutions—targeting ranges from 7,500 to 8,000 points—suggests Wall Street has reached genuine conviction on continued equity appreciation. As long as AI-driven productivity gains and earnings stability hold, the bull market narrative embedded in these forecasts appears credible for 2026.