Banks expect continued US economic growth and expanding AI investments.
The bull market turned three this year, and Wall Street thinks you should be gearing up to celebrate another big run in 2026.
Analysts at top banks have rolled out their predictions for where they think the market is headed in the coming year. Their forecasts are looking strong across the board, with most expecting US stocks to punch higher as the Fed cuts interest rates, earnings grow, and the US economy continues to chug along.
Despite some recent volatility in the tech sector, stocks are still firmly in bull market territory after back-to-back years of double-digit gains. The S&P 500 is up 17% year-to-date, and has gained 79% since the end of 2022.
Those returns have largely been fueled by the hype for artificial intelligence — a frenzy that's sparked concerns of a stock market bubble and has shown more cracks in recent weeks as investors survey high valuations and seemingly endless AI spending among top tech firms.
Even so, the market has room to grind higher, according to the top analysts.
Here's the rundown of forecasts and price targets from the big banks.
Bank of America
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S&P 500 price target for 2026: 7,100
Upside from current levels: +3%
Core thesis: BofA's prediction is on the lower end, but it still expects S&P 500 earnings to grow 14% for the year. That should help power the market higher, but gains could be held back by factors like fewer stock buybacks, fewer Fed rate cuts than expected, and the possibility that the Fed will only cut rates if the US economy looks weak.
"In 2026, earnings will do the lift," strategists wrote in their year-ahead outlook. "Liquidity is full blast today, but the direction of travel is likely less not more," they added.
JPMorgan
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S&P 500 price target for 2026: 7,500
Upside from current levels: +9%
Core thesis: The bank is eyeing above-trend earnings growth of 13%-15% for at least the next several years. That should help sustain high valuations in the stock market, alongside a boom in AI-related capital expenditures, larger shareholder payments, and fiscal stimulus from President Donald Trump's Big Beautiful Bill.
HSBC
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S&P 500 price target for 2026: 7,500
Upside from current levels: +9%
Core thesis: Global stocks will keep rallying next year as the AI trade expands beyond the hyperscalers that have positioned themselves at the center of the artificial intelligence craze. Investors can expect to see earnings growth slow down for the Magnificent Seven, while earnings pick up in the rest of the S&P 500.
The broadening of the rally is generally considered a healthy trend among investors, who want to see more breadth and less reliance on just a few stocks to drive more gains.
HSBC thinks US economic growth will remain solid, a factor that should help cyclical stocks outperform.
RBC
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S&P 500 price target for 2026: 7,750
Upside from current levels: +12%
Core thesis:
The bank said it had determined its price target based on various models that project the S&P 500's return based on factors like sentiment, valuations, and economic and monetary policies.
Investor sentiment is at levels that are sending a "contrarian buy signal" for long-term investors, the bank said. Strategists added expected solid earnings growth and expected rate cuts from the Fed to prop up the market, though subdued economic growth could be a drag on stock returns.
Morgan Stanley
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S&P 500 price target for 2026: 7,800
Upside from current levels: +13%
Core thesis: Stocks will get a lift next year from strong corporate earnings and a "rolling recovery" in the economy that's expected to pick up steam, Morgan Stanley strategists said. The bank referred to its previous view that the US was in the midst of a "rolling recession," where a downturn hits the economy in various sectors at different times.
"We believe that we're in the midst of a new bull market and earnings cycle, especially for many of the lagging areas of the index," strategists wrote.
Deutsche Bank
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S&P 500 price target for 2026: 8,000
Upside from current levels: +16%
Core thesis: Earnings growth is expected to accelerate to around 14% next year, which will help drive the stock market higher. Valuations in the S&P 500 should be supported by higher payout ratios, fewer large earnings declines, and inflation remaining below its long-term average.
"Our demand-supply framework suggests mid-teens returns on the back of positioning rising from neutral, a continued cross-asset inflows boom benefiting equities, and buybacks rising in line with earnings," the bank wrote a client note.