Market Strategist Adopts Cautious Stance for S&P 500 in 2026 Amid AI Bubble Concerns
Interactive Brokers' chief strategist Steve Sosnick projects a modest 3% decline for the S&P 500 in 2026, potentially marking the first negative year since 2022. The forecast reflects tempered expectations following three consecutive years of gains fueled by AI-driven rallies.
Wall Street's bullish momentum shows signs of fatigue as concerns mount over stretched valuations in artificial intelligence stocks. Bank of America's equity strategist similarly anticipates lackluster performance next year, citing historical patterns of market weakness during midterm election cycles.
The current market landscape reveals growing divergence between crypto assets and traditional equities. While no specific digital assets were mentioned in the strategist's commentary, cryptocurrency markets continue operating on independent cycles - often decoupling from conventional risk assets during periods of stock market uncertainty.
