WE'RE STILL BULLISH ON STOCKS

But now is the time for investors to pull in their horns and dial down risk.

- BY ANNE KATES SMITH

THE U.S. stock market set 36 all-time highs in 2025 through October—remarkable for an aging bull that entered its fourth year that month.

The S&P 500 index returned 17.5% over that period (21.5% in the 12 months since we published our 2025 Investing Outlook), and a cumulative 91% since the bull market began in October 2022. So why do some investors feel like there's a piano tied with a fraying rope suspended above their heads? The risks they're worried about include sticky inflation and a weakening job market, continuing trade tensions and potential cracks in the credit markets. Above all, investors are leery of an artificial intelligence boom that brings to mind bubbles of markets past. Are these concerns just proverbial bricks in the wall of worry that bull markets like to climb? Or are they signposts of something more sinister?

We think the bull market will remain intact and deliver further gains to investors in 2026, driven by a resilient economy, lower interest rates and decent corporate earnings growth. Stock market strategists that we track see the S&P 500 closing out 2026 at a price level between roughly 7200 and 7750. We'll ballpark it conservatively, near the midpoint at somewhere around 7500. That's up from a close of 6840 on October 31, the date for prices and returns in this story, implying a price gain of more than 9%. Add in dividends for a total return of just under 11%—call it low double digits. “We've had three straight years of double-digit returns,” says Shannon Saccocia, chief investment officer in the wealth management division of Neuberger Berman. “The absolute return might be more modest in 2026, but we remain constructive.”