Analysts Are Bullish About Stocks in 2026. Time to Short the Market?

"No doubt about it: when large-cap stocks keep marching higher, it can feel like the party will never end. In early 2026, the S&P 500 index continues to hit new all-time highs and analysts are almost universally bullish. Whether it's through the SPDR S&P 500 ETF ( NYSEARCA:SPY), the Vanguard S&P 500 ETF ( NYSEARCA:VOO), or another exchange traded fund (ETF), investors are enthusiastically piling into the S&P 500."

"Although 2022 wasn't a great year for large-cap U.S. stock investors, the following three years yielded outsized gains. In fact, the S&P 500 returned 26.3% in 2023 followed by 25% in 2024 and 17.9% in 2025. Throughout the years, the prevailing wisdom has been that investors should expect to earn 8% to 10% per year from an S&P 500 fund. So clearly, the past three years' stock market returns have been unusually robust."

"On average, as of December 22 of last year, prominent Wall Street strategists expect the S&P 500 to gain 10.15% in 2026. Furthermore, out of 21 analysts, not one of them predicts that the S&P 500 will finish flat or down this year."

Large-cap U.S. stocks have rallied into early 2026, with the S&P 500 repeatedly hitting new all-time highs and investors buying S&P 500 ETFs such as SPY and VOO. The index delivered outsized returns recently: 26.3% in 2023, 25% in 2024 and 17.9% in 2025, well above typical long-term expectations of 8%–10% annually. Wall Street strategists set 2026 price targets implying an average gain of about 10.15%, and among 21 surveyed analysts none forecast a flat or down year. Some contrarian investors express concern about crowding into the long side and historical midterm-year weakness.

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