Will the Stock Market Crash Under President Donald Trump in 2026? Wall Street Has a Surprising Answer for Investors.

Core Viewpoint - Analysts expect double-digit gains in the S&P 500 for the remaining months of 2026, despite concerns over economic slowdown and high valuations [2][4][6] Economic Growth and Earnings - S&P 500 companies reported acceleration in revenue and earnings growth in 2025, with expectations for further acceleration in 2026 driven by economic growth, tax cuts, and AI spending [3] - The S&P 500 has shown strong performance with double-digit returns in 2023, 2024, and 2025, and a positive start in 2026, gaining over 1% year to date [5] Valuation Concerns - The S&P 500 currently trades at 22 times forward earnings, significantly above the 10-year average of 18.8 times, indicating a premium valuation [8] - Historical context shows that such high valuations were only sustained during the dot-com bubble and the COVID-19 pandemic, both of which led to bear markets [9] Economic Uncertainty - Economic uncertainty is heightened by President Trump's tariffs, which have led to reduced hiring and slow job growth, with only 181,000 jobs added in 2025 compared to 1.2 million in 2024 [4][10] - Historically, the S&P 500 has averaged a return of just 4.6% in midterm election years, with an average intra-year drawdown of 17%, suggesting potential volatility in 2026 [11] Analyst Forecasts - 20 Wall Street research organizations project S&P 500 returns ranging from 2% to 17% for the remainder of 2026, with a median forecast of approximately 10% [6] - Despite these forecasts, Wall Street has historically struggled with accuracy in predicting year-end S&P 500 levels, with a median error of 16 percentage points over the last four years [7]