So Goldman Sachs just dropped their 2026 market predictions, and honestly? They’re basically saying “more of the same, but maybe chill out a little.” After three years of the stock market acting like it’s on espresso shots, the investment bank thinks we’re in for another good year—just not a completely bonkers one.
Here’s the deal: They’re calling for the S&P 500 to hit 7,600 by year-end, which is a solid 12% gain. Not too shabby, but also not the kind of rocket ship we’ve gotten used to. Think of it as the market switching from Red Bull to regular coffee.
The Five Things Goldman Actually Cares About
1. The Bull Market Keeps Trucking (But Slower)
The good times aren’t over, they’re just… less caffeinated. Goldman thinks strong earnings will keep pushing stocks higher, thanks to AI making everyone more productive and big companies printing money like usual. It’s like that friend who’s still fun at parties but goes home by midnight now.
2. Cyclical Stocks Get Their Moment
Early 2026 is apparently cyclical stock season. These are the companies that do well when the economy is humming—think construction, consumer goods, stuff like that. Goldman’s betting on Trump’s “Big Beautiful Bill” (yes, that’s what they’re calling it) to juice the economy without the usual late-cycle headaches like wage inflation or the Fed getting cranky.
3. AI Spending Goes Absolutely Bananas
Here’s where things get spicy: AI capital spending is expected to jump 36% to $539 billion this year. That’s not a typo. Big tech companies are basically throwing money at AI infrastructure like they’re trying to build the Death Star. In 2027? Another $629 billion. At some point, these companies better start making some serious cash to justify all this spending.
4. The AI Trade Gets a Makeover
We’re entering “Phase 3” of the AI revolution (because apparently everything needs phases now). Phase 2 was all about building the pipes—now it’s time to actually use them. Goldman thinks we’ll see which companies can actually turn AI into real profits, not just cool demos. It’s like finally finding out which of your startup friends actually has a business model.
5. M&A Madness Continues
Companies are apparently feeling frisky about buying each other. Goldman expects merger and acquisition activity to jump 15% this year. With the economy looking decent and money getting cheaper to borrow, CEOs are dusting off their “let’s buy our competitors” playbooks.
The Bottom Line
Goldman’s basically saying 2026 will be like a really good sequel—not as mind-blowing as the original, but still worth watching. The market’s growing up a bit, AI is moving from hype to actual business, and everyone’s feeling confident enough to make some big moves.
Will they be right? Who knows. But at least their predictions sound reasonable instead of completely unhinged, which is refreshing in a world where everyone’s either screaming about crashes or promising the moon.