are stocks going to go up in 2026?

are stocks going to go up is a forward-looking market question with no certain answer. This data-driven guide explains the drivers (earnings, rates, AI, policy, breadth), the latest strategist view...

2025-12-24 16:00:00

By Alex Carter

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Are stocks going to go up?

are stocks going to go up is one of the simplest—and most asked—questions in investing. In plain terms, the phrase asks whether US equities (broad indexes such as the S&P 500 or the Nasdaq, or individual US-listed stocks) will rise over a specified horizon. The correct answer is probabilistic: outcomes depend on corporate earnings, monetary and fiscal policy, valuation, investor sentiment, and sector leadership. This article explains how professionals approach the question, what the data and major strategist surveys (late 2025–Jan 2026) say, which indicators matter, possible scenarios, and practical steps investors can take while avoiding definitive predictions.

Note: this article is neutral and educational. It summarizes public forecasts and historical evidence as of late 2025–Jan 2026 and does not offer personalized investment advice.

Background and historical context

The question "are stocks going to go up" sits inside long cycles of bull and bear markets. Over decades, major US indexes have produced positive average returns, but those averages mask wide variation year-to-year and multi-year drawdowns.

Historical probabilities: Over many decades, the S&P 500 has had a majority of positive calendar years, but the index still experiences intermittent bear markets (declines of 20%+). Short-term outcomes are highly uncertain; medium-term outcomes improve in predictability when economic and earnings trends are stable.
Recent cycles (context to late 2025): Following the 2022 market drawdown tied to rapid rate hikes, global equities staged a recovery in 2023–2025 driven by earnings rebounds, technology-led gains (notably AI-related stocks), and pockets of liquidity. That multi-year recovery matters when assessing whether stocks can continue higher in 2026—momentum and policy expectations are key inputs.
Why context matters: The same question asked about the next week can be driven by flows and headlines; when asked about next 12–24 months it is driven more by earnings growth, monetary policy path, and structural themes.

Key drivers that determine whether stocks rise

Many forces interact to push stock prices higher or lower. Below are the most important, described in actionable terms.

Corporate earnings and profitability

Earnings growth is the single most important fundamental driver of returns over medium and long horizons. Index returns equal earnings growth plus changes in valuation multiples.

If earnings across the market (both cap-weighted and median) expand, the index is likely to rise even without multiple expansion.
As of late 2025, strategists pointed to an earnings recovery vs. 2022 lows as a primary bullish input. For instance, Morgan Stanley’s 2026 outlook emphasized earnings-led gains in its bullish scenarios (As of Dec 2025, according to Morgan Stanley research).

Practical metric to watch: earnings-per-share (EPS) revisions and the percentage of companies revising estimates upward versus downward during earnings season.

Monetary policy and interest rates

The Federal Reserve’s policy path strongly affects equity valuations.

Lower real rates (or credible expectations of rate cuts) tend to lift valuation multiples and support higher equity prices.
Higher rates or a delayed easing cycle compress multiples and can trigger sector rotations away from growth stocks.

As of Jan 2026, many strategist surveys priced at least some Fed easing in 2026, and bulls argued rate cuts would sustain the 2023–2025 rally (As of Dec 2025–Jan 2026, according to CNBC and Wall Street strategist surveys). But disagreements remain on timing and magnitude.

Practical metric to watch: 2s–10s yield curve, short-term forward rate futures, and the timing embedded in Fed dot plots and Fed communications.

Fiscal policy and taxation

Fiscal actions—tax changes, targeted stimulus, credits for investment—affect corporate margins and demand.

Clarifying tax or subsidy policy for key sectors (e.g., semiconductors, clean energy) can change profitability trajectories.
Policy uncertainty or abrupt fiscal reversals raise risk premia and can cap valuations.

As of Dec 2025, several policy moves and trade negotiations were noted by strategists as material influences for 2026 market returns (As of Dec 2025, according to Bloomberg reporting).

Technological cycles and structural themes (AI and other secular trends)

Secular technology trends are a multi-year driver. The AI investment cycle—capex for data centers, chips, models, and software—has been a core bullish narrative since 2024–2025.

Example: rapid deployments of large GPU farms and AI-specific infrastructure have underpinned parts of the 2023–2025 rally. High-profile execution by firms building vertical AI stacks has changed investor expectations about future productivity and addressable markets. News coverage through late 2025 highlights vertical players that combine data, compute and distribution—and how markets are re-pricing companies that participate in end-to-end AI ecosystems (As of Jan 2026, reporting on AI deployments and corporate capex).

Tail risk: if AI capex fails to produce near-term earnings gains, disappointment could trigger fast derating.

Trade policy and geopolitical risk

Tariffs, export controls, and supply-chain decisions affect costs and investment location.

Agreements that encourage onshore chip capacity, for example, can lift capital spending by semiconductor firms and their suppliers; conversely, tariff threats raise costs and uncertainty.

As of early 2026, public reports noted major chip supply agreements and stimulus aimed at encouraging domestic production—factors that push industry capex and potential stock gains (As of late 2025, according to Reuters and MarketWatch reporting).

Market breadth and sector leadership

Whether market gains are narrow (concentrated in a few megacaps) or broad matters.

Broadening leadership from megacap tech into cyclicals, financials, and industrials suggests a healthier expansion that can support continued gains.
Conversely, if the rally is confined to a handful of names, the index can be vulnerable to volatility if those names stumble.

Analysts in late 2025 flagged breadth as a key watchpoint; some rallies were still skewed to a few AI and semiconductor-related leaders (As of Dec 2025, according to CNBC and Barron’s coverage).

Investor sentiment, liquidity, and technical factors

Flow-driven dynamics—ETF flows, buybacks, margin conditions—can accelerate moves.

Positive liquidity (cash on sidelines, inflows into equities) supports rallies.
Technical breakouts, moving-average crossovers, and momentum indicators can amplify price moves beyond fundamentals in the short term.

Practical metric to watch: ETF net flows, corporate buyback announcements, margin debt trends, and short interest.

Recent professional forecasts and consensus (2025–2026)

Professional forecasts vary. Below are representative views that informed the near-term consensus windows as of late 2025–Jan 2026.

As of Dec 2025, Morgan Stanley’s 2026 outlook included scenarios where the U.S. stock market could guide global growth if earnings and Fed paths align with a modest easing cycle (As of Dec 2025, Morgan Stanley investment outlook).
As of Dec 19, 2025, a CNBC Market Strategist Survey summarized a range of Wall Street targets for the S&P 500 and highlighted a median strategist view supportive but not uniform on magnitude (As of Dec 19, 2025, CNBC Market Strategist Survey).
As of Jan 14, 2026, some commentators (e.g., CNBC coverage of intraday moves) noted volatility tied to single-stock leadership and questioned breadth-driven sustainability (As of Jan 14, 2026, CNBC reporting).
Morningstar and other large houses published views favoring US outperformance in 2026 based on earnings and structural advantages (As of late 2025–early 2026, Morningstar commentary).
Business Insider and Barron’s compiled bank and strategist S&P targets for 2026 that ranged widely depending on earnings and Fed assumptions (As of Dec 2025, Business Insider and Barron’s reporting).

Taken together, the consensus in late 2025–early 2026 leaned modestly bullish for US equities—conditional on earnings resilience and the Fed delivering easing as priced—while acknowledging significant dispersion and policy/timing risks.

Risks and uncertainties that could reverse or limit gains

Even when forecasts are net-positive, clear downside scenarios could stall or reverse gains.

AI disappointment or under-delivery

If AI investments do not translate into measurable revenue or margin improvement within investor time horizons, investors may quickly re-price expectations. Execution gaps, model underperformance, or regulatory limits can all create disappointment.

Policy shocks (tariffs, fiscal reversals, regulatory rulings)

Unexpected tariffs, sudden regulatory changes, or major legal rulings that affect specific industries can shave profits or reduce investor appetite for targeted sectors.

Monetary-policy tightening or delayed easing

If inflation remains sticky and the Fed pauses or hikes again, multiples can compress and growth stocks may suffer disproportionate declines.

Macroeconomic slowdown or labor-market deterioration

A material slowdown or rising unemployment that hurts consumer demand will reduce revenue prospects across many cyclical sectors and increase credit stress for smaller firms.

Valuation and sentiment-driven corrections

Elevated valuations leave markets vulnerable to mean reversion. A sentiment shock—big-than-expected earnings misses, a geopolitical incident, or sudden withdrawal of liquidity—can create sharp drawdowns.

How different asset classes and sectors might behave if stocks rise

When US stocks go up, correlations across asset classes often shift:

Bonds: Long-duration bonds may underperform if stocks rally on growth and inflation expectations rise; conversely, rate-easing-driven equity rallies can lift both equities and long bonds.
US dollar: Risk-on rallies sometimes weaken the dollar, aiding commodity-linked sectors and multinationals' foreign revenue.
Commodities: Cyclicals and industrial commodities tend to benefit if the rally broadens into cyclicals.

Sector leaders in a bullish 2026 scenario (conditional on AI and easing):

Technology / AI-related hardware and software
Semiconductors and industrials tied to capex
Financials, if higher rates normalize and loan growth improves

Defensive leaders in weaker scenarios: consumer staples, utilities, and healthcare.

Implications for individual investors

Time horizon and risk tolerance

Whether you ask "are stocks going to go up" for the next week or the next five years changes the answer. Longer horizons smooth short-term noise and make earnings and economic growth more determinative.

Portfolio construction and risk management

Practical rules to consider (educational, not advice):

Diversify across asset classes and sectors to avoid overexposure to single-theme risk.
Use position sizing and rebalancing rather than attempting to time precise market tops or bottoms.
Consider hedges (options, cash buffers) for tactical protection if risk tolerance is low.

Strategists in late 2025 suggested modest sector tilts toward AI beneficiaries while preserving defensive exposures until visibility on rates and earnings improved (As of Dec 2025, multiple strategist notes).

Common pitfalls and behavioral considerations

Avoid overreacting to headlines. Markets often price in policy rumors quickly; acting on noise can lock in mistakes.
Don’t concentrate in “hot” names or themes without understanding valuation and execution risk.
Beware of confirmation bias—seek diverse research inputs and watch objective indicators.

Relation to cryptocurrencies and other risk assets

Cryptocurrencies often trade as risk-on assets and can correlate with equities when liquidity and risk appetite move in tandem. However, crypto markets remain more volatile and subject to different fundamentals (protocol adoption, on-chain activity, regulatory shifts).

When equities rally due to easing and risk appetite, crypto can lead on the upside—but it also tends to fall harder during risk-off episodes.
Investors seeking cross-asset exposure can monitor liquidity indicators, ETF flows, and on-chain metrics (transaction volumes, wallet growth) for early signs of shifting risk appetite.

If you use custodial or non-custodial solutions, consider secure options like Bitget Wallet for custody and Bitget exchange for market access—both are presented as platform options in the ecosystem and prioritized here as neutral product mentions.

Market indicators to watch (signal checklist)

Below is a practical checklist that analysts and investors use to monitor the odds that stocks go up:

Earnings revisions: percentage of companies with upward EPS revisions vs. downward.
Fed signals: changes in Fed guidance, dot plot shifts, and futures pricing for cuts/hikes.
Yield curve behavior: 2s–10s slope and the short-end reaction to policy.
Breadth indicators: advance/decline line, number of stocks above 200-day moving averages.
Sector leadership: whether gains are broad or concentrated in a few megacaps.
Macro prints: CPI, PCE inflation, payrolls, and retail sales surprises.
Flow data: equity ETF net inflows/outflows, corporate buyback announcements.
AI capex and supply-chain news: large GPU deployments, data-center buildouts, and chip-fab announcements.

Monitoring these indicators together offers a clearer picture than any single metric.

Historical scenarios and case studies

A few recent examples illustrate how the indicators worked in practice:

2022–2023 drawdown and recovery: rapid rate hikes in 2022 contributed to a major drawdown. When inflation showed signs of peaking and earnings stabilized, liquidity and sentiment improved—helping the 2023–2025 rebound.
2024–2025 AI-capex-driven leadership: large-scale GPU deployments and semiconductor supply-chain investments created concentrated leadership in AI-adjacent names; breadth improvement followed as cyclicals rejoined the party in parts of 2025.

Lessons: watch the transition from narrow to broad participation, and verify that earnings follow the excitement.

Summary and probabilistic assessment

So, are stocks going to go up? The careful answer is: it depends on conditional factors. As of late 2025–Jan 2026, the consensus among many strategists was modestly supportive of further gains—conditional on earnings growth, some Fed easing, and continued AI-driven capex (As of Dec 2025–Jan 2026, citing Morgan Stanley, CNBC, Morningstar and strategist surveys). Key downsides remain: policy shocks, rate surprises, macro slowdowns, or AI disappointment.

Probabilistic framing:

If earnings growth continues and the Fed eases as priced, the probability of further gains over the next 12 months increases materially.
If earnings disappoint or the Fed keeps rates higher for longer, the probability shifts toward flat or negative returns.

Investors should therefore treat the question as conditional, use measurable indicators (earnings revisions, Fed signals, breadth), and align actions with time horizon and risk tolerance.

References and reporting dates (representative)

As of Dec 2025, Morningstar: "Why US Stocks Will Outperform International in 2026..." (Morningstar commentary).
As of Jan 14, 2026, CNBC: "Jim Cramer unpacks Wednesday's market action..." (CNBC reporting on intraday leadership and breadth).
As of Dec 2025, Morgan Stanley: "Investment Outlook 2026: U.S. Stock Market to Guide Growth" (Morgan Stanley research note).
As of Jan 2026, The Motley Fool: "Best Growth Stocks to Buy in January 2026" (sector and idea compilation).
As of Dec 2025, Barron’s: "How the Market’s Rally Can Keep Going in 2026—and What to Buy Now" (Barron’s analysis).
As of Dec 2025, CNBC: coverage summarizing strategist surveys and optimistic views on AI-driven growth.
As of Dec 2025, Business Insider: "Here are the 2026 stock market predictions from all of Wall Street's top banks" (compilation of bank targets).
As of late 2025, U.S. Bank perspective: "Is a Market Correction Coming?" (U.S. Bank analysis of correction risks).
As of Jan 2026, Reuters and Bloomberg reporting on sector rotation, policy steps, and geopolitical/trade developments affecting markets.
As of Jan 2026, MarketWatch coverage and AFP/Getty Images excerpts on corporate and AI execution profiles (reporting on large-scale AI deployments and strategic positioning).

All references reflect reporting and analyst commentary available in late 2025–Jan 2026. Forecasts cited are conditional and not guaranteed outcomes.

Practical next steps and how Bitget can help

If you want to explore markets or allocate across asset classes, consider these neutral steps:

Track the indicators listed above on a regular schedule (weekly or monthly updates).
Use diversified instruments rather than single-stock concentration when expressing macro views.
For custody and trading access, Bitget offers exchange services and Bitget Wallet for self-custody. Explore Bitget’s market tools and wallet documentation to help implement tactical exposures and manage digital-asset allocations safely.

Further exploration: monitor earnings seasons, Fed meetings, and AI capex reports to update your view on whether stocks are more or less likely to go up in coming months.

Article compiled and updated with reporting through Jan 2026 from multiple public sources. This content is educational in nature; it does not constitute financial or investment advice.

The content above has been sourced from the internet and generated using AI. For high-quality content, please visit Bitget Academy.