2026 Market Outlook: A Grinding Bull Market In A Frothy S&P 500
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Douglas McKenny851 FollowersFollow5ShareSavePlay(19min)CommentsSummarySPDR S&P 500 ETF (SPY) is rated Buy for 2026, with a projected 6.8% return amid expectations for lower returns and higher volatility.Consensus targets imply 9.08% upside, but Bayesian adjustments for valuation, equity preference, and macro factors temper expectations to 6.83%.AI-driven capital expenditure, permanent 100% bonus depreciation, and monetary easing are key supports, while high valuations and equity allocations limit upside.Expect positive but compressed returns as earnings growth, not multiple expansion, drives SPY, with episodic volatility but low risk of a destructive crash. Galeanu Mihai/iStock via Getty Images The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500, is up 17.59% year-to-date (YTD) in a year in which the Federal Reserve has cautiously resumed interest rate cutting, and the United States has embraced protectionist policies for the firstThis article was written byDouglas McKenny851 FollowersFollowAn economics graduate with a passion for financial history; I apply my knowledge to markets in an effort to hopelessly predict trends and spot value. All opinions are my own and should not be taken seriously.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You