Expect a 3-5% return in the S&P 500 in 2026, says Freedom Capital's Jay Woods

Market Outlook - Freedom Capital Markets anticipates the bull run to continue, but at a slower pace of 3% to 5% from current levels, targeting the S&P return into the 7200s [4][7][8] - The market broadening will persist, with technology experiencing a divergence between winners and losers, potentially impacting the performance of mega-cap stocks [5][6] - Midterm election years typically introduce market volatility, but gridlock could create favorable conditions for 2027 [7] Sector Analysis - Financials and industrials are favored sectors, with specific interest in big banks like JP Morgan and Goldman Sachs, and Citigroup due to strategic changes implemented by Jane Frasier [9][10] - Transports are expected to lead, indicating slow, steady economic growth, with FedEx, UPS, and trucking companies showing strength [8][11][12] Potential Risks and Uncertainties - The Scottish ruling on tariffs poses a risk, potentially leading to uncertainty and market trepidation if tariffs are deemed illegal [16][17] - The transition to a new Fed chair and the increased visibility of voting members could introduce volatility into the market [18][19] Financial Sector Dynamics - Financials have performed well despite low consumer confidence, driven by strong earnings and M&A/IPO activity [14][15] - A pullback in financials could present a buying opportunity, as the sector tends to move in cycles [15]