Can Stocks Keep Rising This Year? The One Bullish Signal This Expert Won’t Shut Up About

Markets defy gravity—again. While traditional analysts squabble over P/E ratios and Fed whispers, one signal cuts through the noise.

The Liquidity Lifeline

Forget earnings season. Ignore the geopolitical theater. The real engine, according to insiders, is the sheer volume of capital sloshing through the system. It's simple, brutal, and often ignored by spreadsheets: money in motion finds a home.

Digital Assets: The Pressure Valve

This isn't just about old-economy tickers. That liquidity surge doesn't just lift all boats—it floods the harbor. Smart money, tired of fractional basis-point gains, increasingly bypasses traditional gatekeepers. The flow is real, and a significant portion is seeking asymmetric returns beyond the S&P.

The Cynical Take

Let's be honest—half of Wall Street's 'complex models' are just fancy ways of saying 'we printed a lot.' When the tide of cheap money recedes, that's when we'll see who's been swimming naked. Until then? The party finds its most volatile, and potentially most profitable, corner in the digital arena. The expert's one reason is the only one that's ever truly mattered: follow the money. Even when it's moving at the speed of light.

Key Takeaways

• Lori Calvasina, RBC Capital Markets' head of U.S. equity strategy, thinks continued earnings growth can power stocks higher in 2026.
• Analysts raised earnings expectations for the last three months of 2025 over the course of the fourth quarter—'a rare thing,' FactSet's John Butters said.

Can the S&P 500 post another year of double-digit returns? If it does, one market expert says, it'll earn it.

Some have warned that U.S. stocks can't post outsize gains forever. After a decade of posting exceptional performance, helped by a strong dollar and valuation expansion, the S&P 500's winning streak seems likely to stop or, at least, come under pressure—especially if big rate cuts aren't in the offing. But some analysts think the index has at least another good year in it.

The reason? Strong growth in corporate earnings. Lori Calvasina, RBC Capital Markets' head of U.S. equity strategy, sees the S&P 500 hitting 7750 in the next 12 months, implying upside of a little more than 11% from recent levels. At the end of 2025 that figure was 13%, she said, aligning with consensus earnings growth expectations at the time.

"We're not looking for multiple expansion. We're not looking for a big decline in the multiple," Calvasina told CNBC Thursday. "We think this market is going to get what it deserves, but from an earnings perspective."

WHY THIS MATTERS TO YOU

While much of last year was dominated by concerns about mega-cap tech stocks' lofty valuations, this year, market experts see fundamentals (not sentiment) driving the S&P 500 higher.

RBC's price target, which the firm updates monthly, is underpinned by its assessment of investor sentiment; valuation and earnings per share; stocks' appeal relative to bonds; the macroeconomic backdrop; and monetary policy.

Signals from the current earnings season appear to shore up that forecast. Analysts have been more optimistic than usual in their earnings outlooks for the fourth quarter of 2025, raising their estimates over the course of those three months as opposed to lowering them. That's "a rare thing," FactSet's John Butters said in an interview with financial media show MRKT Call yesterday.

The estimated growth rate for the fourth quarter has risen to 8.1% from 7.2% at the end of September, he said.

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The tech sector saw the biggest jump in earnings per share revisions, Butters said, with some of the Magnificent Seven—such as Nvidia (NVDA), Microsoft (MSFT), and Apple (AAPL)—driving those upward changes.

DataTrek's Nicholas Colas and Jessica Rabe said the only times over which analysts raised their quarterly estimates higher during a reporting period was in the first three quarters of 2021, and in the last two of last year. Because analysts tend to lower, rather than hike, their estimates, "this makes the last two quarters somewhat remarkable, and in our view supportive of current high S&P 500 valuations," they wrote earlier this week.