# Will the S&P finish positive this year?

2026

Updated: May 10, 2026

Category: Financials

Tags: Indices

HTML: /markets/financials/indices/will-the-s-p-finish-positive-this-year/

## Short Answer

**Key takeaway.** Both the **model** and the **market** expect Positive Growth for the S&P this year, with no compelling evidence of mispricing.

## Key Claims (January 2026)

**- - S&P 500 earnings growth for 2026 is robust, with upward revisions.** - New U.S. tariffs on China could cut S&P 500 earnings before year-end 2026.
- Wall Street's 2026 S&P 500 targets exceed prediction **market** forecasts.
- S&P 500 bull case for 2026 anticipates sustained high valuations and margin growth.

### Why This Matters (GEO)

- AI agents extract claims, not arguments.
- Improves citation probability in summaries and answer cards.
- Enables fact stitching across multiple sources.

## Executive Verdict

**Key takeaway.** **Model** expects **78.5%** **probability**, **7.5%** above 71c **market**, with robust earnings and 1.4x payout.

### Who Wins and Why

| Outcome | Market | Model | Why |
| --- | --- | --- | --- |
| Positive Growth | 71.0% | 78.5% | The S&P 500 is already up 5-6% year-to-date as of May 2026, with Wall Street analysts forecasting continued growth for the year, though significant risks such as high oil prices and persistent inflation are noted [1][2][3][4][5][6][7][8]. |

## Model vs Market

- Model Probability: 78.5% (Yes)
- Market Probability: 71.0% (Yes)
- Yes refers to: Positive Growth
- Edge: +7.5pp
- Expected Return: +10.6%
- R-Score: 0.75
- Total Volume: $634,403.5
- 24h Volume: $243.95
- Open Interest: $362,229.17

- Expiration: January 1, 2027

## Market Behavior & Price Dynamics

This prediction market has shown a consistent upward trend, with the probability of the S&P 500 finishing the year positive climbing from a starting point of 64.0% to a current high of 71.0%. The most significant price movement occurred between late April and early May 2026, when the price jumped from 64.0% to 69.0%. This sharp increase in perceived probability directly corresponds with news of a major market rally in April, during which the S&P 500 reportedly rose over 10% to a record high. The rally was further supported by strong first-quarter earnings growth that surpassed expectations, providing a clear fundamental basis for the increased optimism seen in the market's price action.

Trading volume patterns reinforce the market's growing conviction. The substantial price increase in early May was accompanied by a significant spike in trading volume, suggesting that the move higher was backed by strong participation and belief. The initial price of 64.0% has acted as a support level for the market, while the current price of 71.0% represents a new high, establishing the upper boundary of the recent trading range. Overall, the price chart indicates a clear and strengthening market sentiment that the S&P 500 will maintain its year-to-date gains and close 2026 in positive territory. The steady climb, coupled with volume spikes on positive news, reflects a market that is actively and confidently reacting to favorable economic developments.

## Contract Snapshot

This market resolves to "Yes" if the S&P 500 index value before December 31, 2026, at 4pm EST is above 6845.50; otherwise, it resolves to "No." The market closes at 7:00pm EST on December 31, 2026, with a projected payout one minute later. The outcome is verified from a source such as Google Finance, and the market will expire at the sooner of the first data release or one week after December 31, 2026.

## Market Discussion

Traders are discussing both the S&P 500's potential performance and the clarity of the market's resolution rules. A key debate centered on whether "before Dec 31" referred to any high point during the year or the final closing value, with users largely agreeing it means the final closing price on Dec 31, 2026. Arguments for a positive finish cite a dovish Fed with potential rate cuts and significant AI capital expenditure, while bearish views point to unfavorable high-timeframe charts. The market currently shows a 71% probability for "Yes."

## Market Data

| Contract | Yes Bid | Yes Ask | Last Price | Volume | Open Interest |
| --- | --- | --- | --- | --- | --- |
| Positive Growth | 70% | 71% | 71% | $634,403.5 | $362,229.17 |

## What evidence supports the consensus forecast for 12-15% S&P 500 earnings growth in 2026, and which sectors are expected to contribute most?

FactSet S&P 500 Earnings Growth CY2026 | 15% [[^]](https://insight.factset.com/sp-500-cy-2026-earnings-preview-analysts-expect-earnings-growth-of-15) |
Goldman Sachs EPS Growth 2026 | 12% [[^]](https://www.goldmansachs.com/insights/articles/the-sp-500-expected-to-rally-12-this-year) |
IT Sector Earnings Contribution | Approximately 30% ($92 per share) [[^]](https://www.ainvest.com/news/500-2026-outlook-earnings-momentum-supports-bull-case-geopolitical-headwinds-2605/) |

**S&P 500 earnings growth for 2026 is robust, with recent upward revisions**

S&P 500 earnings growth for 2026 is robust, with recent upward revisions. Analysts initially predicted S&P 500 earnings growth for 2026 to range between 12-**15%**. FactSet's consensus projects **15%** earnings growth for Calendar Year 2026, which surpasses the 10-year average of **8.6%** [[^]](https://insight.factset.com/sp-500-cy-2026-earnings-preview-analysts-expect-earnings-growth-of-15). Goldman Sachs also forecasts **12%** EPS growth for the same period, contributing to an anticipated **12%** total return [[^]](https://www.goldmansachs.com/insights/articles/the-sp-500-expected-to-rally-12-this-year). More recent reports from April-May 2026 indicate an upward revision, with projections now ranging from 17-**21%** [[^]](https://insight.factset.com/sp-500-earnings-season-update-may-8-2026)[[^]](https://index.businessinsurance.com/businessinsurance/article/marketminute-2026-4-3-earnings-revision-momentum-why-analysts-upgraded-s-and-p-500-growth-to-17). This growth is anticipated to be widespread across the index, with the 'Mag7' companies projected to achieve **22.7%** growth, while the remaining 493 companies are expected to see **12.5%** growth [[^]](https://insight.factset.com/sp-500-cy-2026-earnings-preview-analysts-expect-earnings-growth-of-15).

Sector-specific growth is broad, with technology and financials leading contributions. All 11 S&P 500 sectors are projected to experience positive earnings growth [[^]](https://insight.factset.com/sp-500-cy-2026-earnings-preview-analysts-expect-earnings-growth-of-15). Five sectors in particular—Information Technology, Materials, Industrials, Communication Services, and Consumer Discretionary—are expected to deliver double-digit growth [[^]](https://insight.factset.com/sp-500-cy-2026-earnings-preview-analysts-expect-earnings-growth-of-15). The Information Technology sector stands out as a primary driver, with Goldman Sachs indicating it will contribute approximately **$92** per share, making up about **30%** of total earnings [[^]](https://www.ainvest.com/news/500-2026-outlook-earnings-momentum-supports-bull-case-geopolitical-headwinds-2605/). Within the IT sector, semiconductors, including companies like NVIDIA and Micron, are projected by Wolfe Research to account for **39%** of the S&P 500's year-over-year earnings growth [[^]](https://www.investing.com/news/stock-**market**-news/this-is-the-most-important-sp-500-sector-for-earnings-growth-4593496). The Financials sector is also expected to contribute significantly, anticipating **14.4%** earnings growth, with all five of its industries, such as Insurance at **33%** and Consumer Finance at **31%**, projected to be positive [[^]](https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_031226.pdf).

## How might the imposition of new U.S. tariffs on China before year-end 2026 impact S&P 500 technology and industrial sector earnings?

S&P 500 EPS Cut | 2-3% if tariffs sustained (Goldman Sachs) [[^]](https://www.ainvest.com/news/500-faces-150-day-tariff-cliff-earnings-margin-squeeze-looms-2603/) |
Average US Tariff on Chinese Goods (2026) | Approximately 33% [[^]](https://msadvisory.com/china-us-tariffs-guide/) |
Stacked Tariffs on EVs and Batteries | Up to 145% [[^]](https://msadvisory.com/china-us-tariffs-guide/) |

**The imposition of new U.S**

The imposition of new U.S. tariffs on China could cut S&P 500 earnings. These tariffs, if sustained before year-end 2026, are projected to result in a 2-**3%** reduction in S&P 500 earnings per share (EPS), as indicated by Goldman Sachs [[^]](https://www.ainvest.com/news/500-faces-150-day-tariff-cliff-earnings-margin-squeeze-looms-2603/). By 2026, an average U.S. tariff on Chinese goods is anticipated to be around **33%**, with some layered tariffs potentially escalating to **145%** on items such as electric vehicles and batteries [[^]](https://msadvisory.com/china-us-tariffs-guide/).

Technology sector margins may face tariff-related challenges. Despite technology sector supply chains demonstrating elasticity to tariff impacts, historical instances show potential negative influences on earnings within the industry [[^]](https://www.reutersguide.com/the-earnings-impact-of-tariffs/). For example, **15%** levies caused Apple iPhone margins to fall by 70 basis points, representing an estimated **$0.12** EPS risk per 10 million units sold [[^]](https://www.reutersguide.com/the-earnings-impact-of-tariffs/).

Industrial sector earnings could suffer from tariffs and retaliation. Companies in this sector appear particularly vulnerable, given that previous Chinese retaliatory actions in response to tariffs led to a **14%** depression in Deere's EPS [[^]](https://www.reutersguide.com/the-earnings-impact-of-tariffs/). With **60%** of that impact directly linked to tariffs, industrial companies could experience similar negative effects on their earnings from new tariffs and any corresponding retaliatory measures [[^]](https://www.reutersguide.com/the-earnings-impact-of-tariffs/).

## How do Wall Street's median S&P 500 targets for 2026 (7,600-7,700) compare with the forecasts implied by prediction markets like Manifold (~6,960)?

Wall Street S&P 500 Target 2026 | 7,600-7,700 [[^]](https://www.reuters.com/business/jp-morgan-lifts-sp-500-year-end-target-7600-ai-driven-earnings-2026-04-21/)[[^]](https://manifold.markets/jim/sp500-eoy-2026) |
Prediction Market S&P 500 Target 2026 | 6,958 [[^]](https://www.reuters.com/business/jp-morgan-lifts-sp-500-year-end-target-7600-ai-driven-earnings-2026-04-21/)[[^]](https://manifold.markets/jim/sp500-eoy-2026) |
Difference (Wall Street vs. Prediction Market) | 642-742 points higher (9.2%-10.7%) [[^]](https://www.reuters.com/business/jp-morgan-lifts-sp-500-year-end-target-7600-ai-driven-earnings-2026-04-21/)[[^]](https://manifold.markets/jim/sp500-eoy-2026) |

**Wall Street's 2026 S&P 500 targets exceed prediction market forecasts**

Wall Street's 2026 S&P 500 targets exceed prediction **market** forecasts. Wall Street's median S&P 500 targets for 2026 are notably higher than the expectations implied by prediction markets such as Manifold [[^]](https://www.reuters.com/business/jp-morgan-lifts-sp-500-year-end-target-7600-ai-driven-earnings-2026-04-21/)[[^]](https://manifold.markets/jim/sp500-eoy-2026). The consensus from Wall Street projects the S&P 500 to reach between 7,600 and 7,700. This forecast stands in contrast to the 6,958 expectation derived from prediction markets [[^]](https://www.reuters.com/business/jp-morgan-lifts-sp-500-year-end-target-7600-ai-driven-earnings-2026-04-21/)[[^]](https://manifold.markets/jim/sp500-eoy-2026).

Wall Street's forecast significantly surpasses Manifold's by hundreds of points. This represents a substantial divergence, with Wall Street's **market** consensus approximately 642 to 742 points higher than the Manifold-implied expectation [[^]](https://www.reuters.com/business/jp-morgan-lifts-sp-500-year-end-target-7600-ai-driven-earnings-2026-04-21/)[[^]](https://manifold.markets/jim/sp500-eoy-2026). The disparity accounts for an approximate **9.2%** to **10.7%** difference between the two forecasts, with the prediction **market**'s outlook materially below the Street's median [[^]](https://www.reuters.com/business/jp-morgan-lifts-sp-500-year-end-target-7600-ai-driven-earnings-2026-04-21/)[[^]](https://manifold.markets/jim/sp500-eoy-2026).

## What does historical S&P 500 data since 1980 show about the probability of a positive annual return after the index is already up over 5% through May?

S&P 500 Average Annual Return | Approximately 10-11% (1980-2025) [[^]](https://www.macrotrends.net/2526/sp-500-historical-annual-returns)[[^]](https://www.upmyinterest.com/sp500/)[[^]](https://www.slickcharts.com/sp500/returns)[[^]](https://www.thebalancemoney.com/stock-market-returns-by-year-2388543) |
December S&P 500 Positive Return Frequency | Approximately 75% of the time [[^]](https://www.schaeffersresearch.com/content/analysis/2024/12/04/s-p-500-looks-headed-for-strong-2nd-half-of-december)[[^]](https://www.stonex.com/en/thought-leadership/12-03-2024-sp500-december-seasonality/)[[^]](https://www.schaeffersresearch.com/content/analysis/2025/12/15/s-p-500-looks-well-positioned-for-year-end-rally) |
S&P 500 YTD Return (May 2026) | 4.24% price, 7.58% total (SPY) [[^]](https://www.ytdreturn.com/for-s-p-500/)[[^]](https://www.sp500live.co/yearly-returns) |

**The research does not explicitly calculate the requested S&P 500 probability**

The research does not explicitly calculate the requested S&P 500 **probability**. The provided analysis did not determine the **probability** of a positive annual S&P 500 return after the index has already been up over **5%** through May, specifically for data since 1980 [[^]](https://www.currentmarketvaluation.com/quick-charts/s&p-ytd-performance.php)[[^]](https://www.sp500live.co/yearly-returns)[[^]](https://www.officialdata.org/us/stocks/s-p-500/1980). Although the necessary underlying data for such an analysis might be available, it was not extracted or included within the scope of the provided facts [[^]](https://www.currentmarketvaluation.com/quick-charts/s&p-ytd-performance.php).

S&P 500 historical annual returns show significant variability. Between 1980 and 2025, the S&P 500 experienced annual returns ranging from -**37%** to +**37.6%**, with an average annual return of approximately 10-**11%** over this period [[^]](https://www.macrotrends.net/2526/sp-500-historical-annual-returns)[[^]](https://www.upmyinterest.com/sp500/)[[^]](https://www.slickcharts.com/sp500/returns)[[^]](https://www.thebalancemoney.com/stock-**market**-returns-by-year-2388543). Furthermore, historical data indicates that December is a particularly strong month for the S&P 500, ranking as the second best for average returns and yielding positive returns roughly **75%** of the time, especially during its second half [[^]](https://www.schaeffersresearch.com/content/analysis/2024/12/04/s-p-500-looks-headed-for-strong-2nd-half-of-december)[[^]](https://www.stonex.com/en/thought-leadership/12-03-2024-sp500-december-seasonality/)[[^]](https://www.schaeffersresearch.com/content/analysis/2025/12/15/s-p-500-looks-well-positioned-for-year-end-rally).

Recent S&P 500 year-to-date performance varied by metric. As of May 2026, the S&P 500's year-to-date price return was approximately **4.24%**, while the total return for SPY was **7.58%** [[^]](https://www.ytdreturn.com/for-s-p-500/)[[^]](https://www.sp500live.co/yearly-returns). This shows that the price return did not meet the "up over **5%** through May" condition, but the total return for SPY did exceed this threshold [[^]](https://www.ytdreturn.com/for-s-p-500/)[[^]](https://www.sp500live.co/yearly-returns).

## How do the bull case (AI-driven productivity) and bear case (sticky inflation) for the S&P 500 in 2026 differ in their assumptions for P/E multiples and profit margins?

Bull Case S&P 500 Forward P/E | 22x [[^]](https://investor.wedbush.com/wedbush/article/marketminute-2026-3-16-goldman-sachs-forecasts-s-and-p-500-surge-to-7600-by-year-end-2026-as-ai-driven-productivity-gains-take-center-stage) |
S&P 500 Net Profit Margins | 13.9% [[^]](https://www.goldmansachs.com/insights/articles/the-sp-500-expected-to-rally-12-this-year)[[^]](https://www.marketwatch.com/story/s-p-500-record-profits-are-a-double-edged-sword-and-it-could-slash-your-returns-9f61bcd3)[[^]](https://www.morningstar.com/news/marketwatch/20260506251/sp-500-record-profits-are-a-double-edged-sword-and-it-could-slash-your-returns)[[^]](https://longbridge.com/en/news/272301564) |
Elevated P/E (Bear Case Risk) | 22x [[^]](https://investor.wedbush.com/wedbush/article/marketminute-2026-3-16-goldman-sachs-forecasts-s-and-p-500-surge-to-7600-by-year-end-2026-as-ai-driven-productivity-gains-take-center-stage)[[^]](https://investor.wedbush.com/wedbush/article/marketminute-2026-1-16-the-2026-market-outlook-high-stakes-stretched-valuations-and-the-ai-second-act)[[^]](https://seekingalpha.com/article/4855901-2026-sp500-outlook-multiple-compression-in-spite-of-earnings-growth) |

**The S&P 500 bull case for 2026 anticipates sustained high valuations and margin growth**

The S&P 500 bull case for 2026 anticipates sustained high valuations and margin growth. This scenario hinges on maintaining an elevated forward price-to-earnings (P/E) multiple of approximately 22x and experiencing margin expansion [[^]](https://investor.wedbush.com/wedbush/article/marketminute-2026-3-16-goldman-sachs-forecasts-s-and-p-500-surge-to-7600-by-year-end-2026-as-ai-driven-productivity-gains-take-center-stage)[[^]](https://markets.financialcontent.com/stocks/article/marketminute-2026-4-2-goldman-sachs-projects-s-and-p-500-to-hit-7600-by-year-end-2026-on-robust-12-earnings-growth). The bull thesis posits that artificial intelligence (AI) will generate "productivity dividends," driving profit margin improvements across a broader range of companies, not just mega-caps [[^]](https://investor.wedbush.com/wedbush/article/marketminute-2026-3-16-goldman-sachs-forecasts-s-and-p-500-surge-to-7600-by-year-end-2026-as-ai-driven-productivity-gains-take-center-stage)[[^]](https://markets.financialcontent.com/stocks/article/marketminute-2026-4-2-goldman-sachs-projects-s-and-p-500-to-hit-7600-by-year-end-2026-on-robust-12-earnings-growth). This optimism exists even as current S&P 500 net profit margins are already near record levels, cited around **13.9%** [[^]](https://www.goldmansachs.com/insights/articles/the-sp-500-expected-to-rally-12-this-year)[[^]](https://www.marketwatch.com/story/s-p-500-record-profits-are-a-double-edged-sword-and-it-could-slash-your-returns-9f61bcd3)[[^]](https://www.morningstar.com/news/marketwatch/20260506251/sp-500-record-profits-are-a-double-edged-sword-and-it-could-slash-your-returns)[[^]](https://longbridge.com/en/news/272301564).

Conversely, the bear case projects P/E compression and margin declines due to sticky inflation. This scenario anticipates that persistent inflation will prevent the Federal Reserve from easing monetary policy as expected, thereby eroding valuation support for the **market** [[^]](https://www.ainvest.com/news/500-faces-sticky-inflation-risk-bull-**market**-relying-fed-dovishness-meets-fragile-economic-reality-2603/). Such an environment challenges the bull thesis, suggesting that AI productivity may not translate into durable earnings and margins, increasing the **probability** of margin shortfalls or multiple compression [[^]](https://www.ainvest.com/news/500-faces-sticky-inflation-risk-bull-**market**-relying-fed-dovishness-meets-fragile-economic-reality-2603/)[[^]](https://seekingalpha.com/article/4855901-2026-sp500-outlook-multiple-compression-in-spite-of-earnings-growth)[[^]](https://longbridge.com/en/news/272301564). With the current forward P/E around 22x, sources suggest "little margin for error," implying that earnings disappointments or inflation-driven discount-rate effects could trigger a **market** re-rating [[^]](https://investor.wedbush.com/wedbush/article/marketminute-2026-3-16-goldman-sachs-forecasts-s-and-p-500-surge-to-7600-by-year-end-2026-as-ai-driven-productivity-gains-take-center-stage)[[^]](https://investor.wedbush.com/wedbush/article/marketminute-2026-1-16-the-2026-**market**-outlook-high-stakes-stretched-valuations-and-the-ai-second-act)[[^]](https://seekingalpha.com/article/4855901-2026-sp500-outlook-multiple-compression-in-spite-of-earnings-growth). A reversion of profit margins from their present high levels towards historical averages would significantly worsen the equity outlook [[^]](https://www.goldmansachs.com/insights/articles/the-sp-500-expected-to-rally-12-this-year)[[^]](https://www.marketwatch.com/story/s-p-500-record-profits-are-a-double-edged-sword-and-it-could-slash-your-returns-9f61bcd3)[[^]](https://www.morningstar.com/news/marketwatch/20260506251/sp-500-record-profits-are-a-double-edged-sword-and-it-could-slash-your-returns)[[^]](https://longbridge.com/en/news/272301564).

## Key Dates & Catalysts

- **Strike Date:** January 01, 2027
- **Expiration:** January 08, 2027
- **Closes:** January 01, 2027

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## Historical Resolutions

No historical resolution data available for this series.

## Disclaimer

This content is for informational and educational purposes only and does not constitute financial, investment, legal, or trading advice.
Prediction markets involve risk of loss. Past performance does not guarantee future results.
We are not affiliated with Kalshi or any prediction market platform. Market data may be delayed or incomplete.

### Data Sources & Model Transparency

**Data Sources:** Octagon Deep Research aggregates information from multiple sources including news, filings, and market data.

**Freshness:** Analysis is generated periodically and may not reflect the latest developments. Verify critical information from primary sources.

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