So here we are, folks – the bulls have been stampeding through Wall Street for three straight years now, and apparently they’re not ready to call it quits. While some analysts tried to declare the bull market dead earlier in 2025 (spoiler alert: they were wrong), most of the smart money says this party started in late 2022 and is still going strong.
Let’s talk numbers, because they’re pretty wild. The S&P 500 just wrapped up 2025 with an 18% gain, hitting an all-time high around 6,932. That’s after posting 24% in 2023 and 23% in 2024. The Nasdaq? Even better at 22.3% for the year. Even the old-school Dow managed a respectable 14.5%.
But here’s where it gets interesting (and slightly terrifying): valuations are getting pretty spicy. The Shiller P/E ratio is sitting near an all-time high at 40.59, while the S&P 500’s trailing P/E is at 31 – the highest since 2020. Translation? Stocks are expensive, like “maybe we should think twice about this” expensive.
Wall Street’s 2026 Predictions: From Bullish to “Meh”
Now for the fun part – watching Wall Street’s finest try to predict the future. Oppenheimer is feeling particularly optimistic, calling for the S&P 500 to hit 8,100 by year-end (that’s a 17% gain, for those keeping score). Their reasoning? Corporate earnings keep beating expectations, and the U.S. economy keeps chugging along like that friend who somehow never gets hungover.
Morgan Stanley is playing it slightly cooler with a 7,800 target (12.5% gain), betting on a perfect storm of Fed rate cuts, corporate tax reductions, and AI-driven efficiency gains. Because apparently AI is the answer to everything these days.
JP Morgan sits in the middle at 7,500, acknowledging that “valuations are undoubtedly rich” but arguing there are “compelling justifications.” That’s Wall Street speak for “yeah, it’s expensive, but hear us out.”
Then there’s Bank of America, playing the role of party pooper with a 7,100 target – basically a 2.6% gain that barely beats inflation. Their head of equity strategy, Savita Subramanian, is watching for signs we’re shifting from a “consumption-driven bull market to a capex-driven one.” Fancy words for “maybe companies will start spending on actual stuff instead of just buying back their own stock.”
The AI Question Mark
The elephant in the room? Whether AI will keep fueling this rocket ship or if we’re due for another tech bubble burst. Nvidia’s up 40% this year, which is impressive but also makes you wonder if we’ve learned anything from previous tech bubbles.
The truth is, nobody really knows what 2026 holds. But with corporate earnings still growing, the Fed potentially cutting rates, and AI continuing to revolutionize everything from your coffee maker to your investment portfolio, the bulls might just keep running.
Just remember: when everyone’s making predictions about where the market will be in 12 months, they’re basically throwing darts at a board while blindfolded. But hey, at least it’s entertaining to watch.