Wall Street Bulls Eye Milder Gains in 2026 After 3-Year Surge

Group 1 - The S&P 500 is expected to advance 9.2% this year, which aligns with the average total return this century but is lower than the previous three years' gains of 24%, 23%, and 16% [1][2] - The average gain expected this year matches the historical average for performance in the fourth year after three consecutive double-digit rallies, although recent history shows declines followed such stretches in 2020 and 2015 [2] - The bullish outlook is based on expectations of economic growth in the first half of the year, driven by tax cuts, regulatory easing, and advancements in artificial intelligence [3] Group 2 - Concerns about high valuations, capital spending plans potentially impacting profits, and the increasing capital intensity of major tech companies contribute to a more cautious market stance [4] - The S&P 500 is projected to gain only 4% this year, with historical data indicating that mid-term election years typically see an average advance of just 3.8% [5] - A three-year stock market run like the recent one often precedes cyclical bear markets, raising concerns about emerging signals of a bear market, particularly regarding AI-linked stocks [6]