Year-end is quickly approaching, meaning one thing on Wall Street: Strategists will be racing to put out their 2026 stock market outlooks. Some shops have already indicated what they expect will happen next year. Morgan Stanley, for instance, expects the S & P 500 to reach 7,800 over the next 12 months. That's almost 16% above Friday's close of 6,734.11. "Key drivers of our bullish earnings/cash flow view include a return of positive operating leverage, greater pricing power, AI-driven efficiency gains, accommodative tax and regulatory policies that facilitate a public to private growth transition, and contained interest rates throughout the curve," strategist Michael Wilson wrote in the investment bank's 2026 global strategy outlook note, released Sunday. For 2025, Wilson called for the S & P 500 to end at 6,500. The benchmark stands 3% above that mark. .SPX YTD mountain SPX year to date Sam Stovall of CFRA also sees strong gains ahead for stocks next year. "Our year-end 2026 S & P 500 target has been set at 7,400," he said in a note last week. That target signals nearly 10% upside from Friday's close. "We see the bull market continuing its run, but slowing its pace, due to stiffening headwinds. In particular, mid-term election years (MTEYs), especially those that may break up a wave (i.e., same party affiliation in the presidency and both houses of congress), have proven quite challenging in terms of volatility and price returns, since an average of four seats in the Senate and 27 in the House changed hands in all MTEYs since 1946," he said. Stovall's 2025 target of 6,525 is also lower than where the S & P 500 is trading Monday morning. These are only the first tricklings of forecasts for next year. Expect other research firms and banks to put out their outlooks in coming weeks.
