Bulls Charge Ahead as Wall Street Predicts Double-Digit Stock Gains Through 2026

Wall Street’s crystal ball is glowing green for 2026, even as investors worry about Big Tech’s spending spree and murmurs of an AI bubble. Nine major banks expect the S&P 500 to top 7.5K by year-end, a gain of ~10% from today. The confidence comes from a mix of Trump’s tax cuts, expected Fed rate reductions, and AI momentum strong enough to push markets past April’s “liberation day” tariff shock.

• Deutsche Bank targets 8K while Bank of America stays cautious at 7.1K, warning that investors are “buying the dream” before AI spending shows up in earnings.
• Morgan Stanley sees the index hitting 7.8K, driven by easy fiscal, monetary, and regulatory policy, including roughly $129B in corporate tax cuts.

Jumping the gun: While mega-cap tech is still carrying the market, international benchmarks continue to lag, with Europe’s Stoxx 600 expected to rise just 6.4% and Japan’s Topix up 5.6%. Deutsche Bank’s Binky Chadha expects US earnings to widen beyond tech in 2026, noting “earnings look like they’re broadening out, across sectors, across regions.” He added, “Everyone characterises my forecast as bullish — I’m concerned it’s not bullish enough.”