The S&P 500, tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY) , reached multiple new all-time highs in 2025, including a record during the week of Christmas. A market expert tells Benzinga that gains in 2026 could be much smaller, with several uncertainties that are difficult to price into the market.Jay Woods S&P 500 PredictionFreedom Capital Markets Chief Market Strategist Jay Woods has shared his top Magnificent 7 stock picks with Benzinga in a recent interview. The market expert also provided his S&P 50 ...

Market Outlook - Deutsche Bank projects the S&P 500 to reach a price target of 7500 by the end of 2026, anticipating the US market to slightly outperform international stocks and a stabilization of the dollar [1][4]. Dollar Performance - The dollar experienced significant weakness in 2025 but is expected to stabilize in 2026, with a forecast of the dollar at 115 and dollar-yen at 145 over the next 12 months [5][4]. - The dollar's performance is influenced by the strength of the US economy, which is generating double-digit returns in equity markets, attracting fund flows [4][5]. Geopolitical Factors - Geopolitical conditions are expected to be more stable in 2026 compared to 2025, with fewer crises affecting oil markets, which are sensitive to political developments [6][4]. Political Influence on Markets - The midterm election year is anticipated to create a unique market narrative, with positive performance in the first and fourth quarters, but potential sideways movement in the second and third quarters [8][7]. - Tax incentives and a projected 20% year-over-year increase in tax refunds in the first half of the year could stimulate consumer spending and market activity [9][10]. Economic Drivers - The current economic growth is primarily driven by non-residential fixed asset investments, particularly in AI data centers, but there is a need for consumer spending to contribute significantly to GDP growth [12][11].

Midterm Elections & Political Landscape - Republicans face increasing danger in the House and Senate, with polling suggesting potential losses in states like Ohio and North Carolina [1][2] - The coalition that brought the president into office in 2024 is now fractured, with Independents leaving, making it difficult to win competitive districts with just the Trump base [5] - Democrats' success in the Miami mayoral race indicates a potential generational shift in Cuban Republican politics and improved voter turnout efforts [9][10][11][12] - Democrats are focusing on affordability and quality of life issues, potentially gaining an edge over Republicans on healthcare and education [13][14] Congressional Agenda & Budget - Congress is expected to pass defense authorization [15] - There are growing voices in the GOP to address healthcare before the end of the year [16] - Another budget fight is anticipated at the end of January, raising the possibility of a government shutdown [19][20] Foreign Policy & Immigration - Immigration support decreased from 49% to 38% [3] - The Trump administration's focus on Venezuela is driven by the desire to topple Maduro and exert influence [6][7][8][9]

Market Outlook & Potential Risks - The market anticipates further stimulus, but a "hawkish cut" by the Federal Reserve, signaling a potential end to rate cuts, could disappoint investors and compress market gains [1][2] - Mega-cap stocks may not experience significant further gains, potentially leading to market consolidation [2][3] - A hawkish Fed message, indicating a pause until the next Fed president is in office (February), could benefit mid and small-cap stocks while the MAG7 stocks may underperform [4] - Historical trends suggest that after three consecutive years of 10% S&P returns, the median return is only 25%, raising concerns about potential consolidation or pullback [5] 2026 Forecast & Volatility - The firm's 2026 S&P price target is 7,150, representing approximately a 4% increase from the previous day's close [5] - Technical and fundamental analysis suggests higher volatility in 2026, with strength in the first half followed by a drawdown in the third quarter before midterm elections [8] - The firm anticipates mid-single-digit returns for 2026, requiring a recalibration of market expectations [8] - A potential 20% pullback is expected around Q2 or Q3, driven by midterm elections [9][10] - The potential loss of the House or Senate by the current administration could trigger the drawdown, while subsequent Fed cuts could catalyze a market recovery [10][11]

Breaking: The Supreme Court clears Texas to use a new Republican-drawn congressional map for next year’s midterm elections https://t.co/DhB0YuSPNe ...

Welcome back. Republicans are breathing a sigh of relief after holding on to a deep red congressional district in Tennessee. Republican Matt Van Eps defeated Democrat Afton Ben in a special election to replace Republican Congressman Mark Green, who resigned earlier this year.Van Eps, though, won by single digits in a district Donald Trump won by 22 points just a year ago. A potential warning sign for Republicans ahead of next year's midterms. But in his victory speech last night, Vaneps not only credited th ...

We are now just 335 days away from the midterms. But this evening, all eyes are on Tennessee's seventh district, which is holding a special election to fill its House seat. This is a district that Donald Trump won by 22 points just one year ago.But this evening, it was a much much closer race. The NBC News decision desk can project that the Republican Matt Vaneps has defeated the Democrat Apt in Bane. But right now, the margin is only about nine points.So, while the Democrats did not gain a seat, they did c ...

From @WSJopinion: If Tennessee Democrat Aftyn Behn manages to make it a tight race in so red a district, what does that say for Republicans’ prospects of keeping their majority in next year’s midterm elections? writes @wjmcgurnhttps://t.co/O92CpfcTJl ...

Election Overview - A special election in Tennessee's 7th congressional district is coming up in less than two weeks, offering insights into voter sentiment ahead of the 2026 midterms [1][3] - The district is described as solidly Republican, but recent election trends suggest potential competitiveness [1][4] - Former Vice President Kamala Harris made an appearance in support of the Democratic candidate [2] Recent Election Trends - Democrats overperformed in recent elections in New Jersey and Virginia compared to the 2024 election results [5] - In New Jersey, the Democratic margin increased from Trump losing by 6 points to a 14-point win [5] - In Virginia, the Democratic margin increased from Harris winning by just under 6 points to a 15-point win [5] - In four special House elections this year, Democrats have overperformed relative to 2024 [6] - In Florida's first district, the Republican win decreased from 37 points to 15 points [6] - In Florida's sixth district, the Republican win decreased from 30 points to 14 points [6] Tennessee 7th District Analysis - Trump won Tennessee's 7th district by 22 points in the last election and by 15 points in 2020 [7] - If the Democratic candidate can narrow the margin to single digits, it would signal momentum for the party heading into the midterms [8][10] - Lower voter turnout and increased Democratic voter motivation could make the race more competitive [8] Republican Strategy - Republicans plan to portray the Democratic candidate as a progressive, labeling her the "AOC of Tennessee," hoping to use this narrative nationally in 2026 [9] - A significant Republican win without a drop-off in support would validate the effectiveness of these attacks for future elections [9]

Redistricting Implications - The Texas redistricting decision could have major implications for the 2026 midterm elections [1][2][3] - California voters overwhelmingly approved new congressional lines that could net Democrats up to five more seats in the next year's House election [3] - The redistricting situation in Texas is unusual because it's happening outside the typical ten-year census cycle [4][5] Legal and Political Responses - The Texas redistricting decision is expected to be appealed, potentially reaching the Supreme Court [1] - Gavin Newsom stated California would "fight fire with fire," indicating a potential retaliatory approach to redistricting [4] - The courts are likely to expedite these redistricting cases due to the upcoming midterm elections [5] Midterm Election Impact - The redistricting process needs to be resolved quickly because voting is happening soon, with primaries in Texas in March [6][7] - The redistricting may influence candidates' decisions on whether to run again [7]