How high will the S&P get this year?
Short Answer
Both the model and the market expect the S&P to peak at 7,200 or above in 2026, with no compelling evidence of mispricing.
1. Executive Verdict
- Continued Fed rate cuts in 2026 Q1 will support GDP and revenues.
- Analysts predict 10-15% S&P 500 EPS growth in 2026.
- Technology and Communication Services, including Mag 7, drive EPS growth.
- Significant AI investment and adoption across industries project continued growth.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| 7,200 or above | 70.0% | 68.5% | Strong corporate earnings growth continues to fuel market gains. |
| 7,800 or above | 34.0% | 29.0% | Broad market rally driven by strong tech sector performance. |
| 7,600 or above | 43.0% | 41.5% | Robust economic data suggests sustained positive market momentum. |
| 8,000 or above | 17.0% | 16.5% | Significant easing of inflation pressures boosts consumer and investor confidence. |
| 7,400 or above | 54.0% | 53.5% | Continued dovish Fed policy supports equity valuations this year. |
Current Context
S&P 500 sentiment balances optimism for growth with recent volatility. Wall Street strategists have largely upgraded their S&P 500 outlook for 2026, with a Reuters poll (February 24, 2026) indicating a median year-end target of 7,500, suggesting a roughly 10% gain from current levels and a potential fourth consecutive year of advances [^], [^]. Deutsche Bank holds the most optimistic target at 8,000 [^]. However, the S&P 500 experienced a decline of over 1% on February 24, 2026, wiping out nearly $500 billion due to renewed tariff uncertainties following President Trump's announcement of new global tariffs [^], [^]. The tech sector, especially software stocks, has shown heightened volatility in early 2026, attributed to investor caution regarding AI disruption and questions about the actual returns on massive AI spending [^]. NVIDIA's earnings report on February 26, 2026, is a significant event being closely watched for its potential to influence sentiment around AI and the broader tech sector [^], [^], [^]. Prediction markets reflect this mixed outlook: Kalshi showed a 66% probability of the S&P 500 reaching 7,200 or higher by year-end on February 17, 2026 [^], yet by February 20-21, 2026, contracts also indicated a 58% probability of an 11% S&P 500 correction from its record high of 6,979 in 2026 [^], [^].
Corporate earnings and economic indicators drive expert S&P 500 targets. Analysts anticipate S&P 500 earnings growth of approximately 14.8% for 2026, with technology companies projected to drive much of this expansion with 33% profit growth [^], [^]. Goldman Sachs forecasts a 12% increase in earnings per share (EPS) for 2026 [^]. The S&P 500 currently trades at about 21.6 times forward earnings, a slight decrease from 22.5 at the start of the year, but still considered elevated compared to its 5-year average (20.0) and 10-year average (18.8) [^], [^]. Sustained economic expansion and accelerating GDP growth are crucial, with Goldman Sachs forecasting "sturdy" global growth of 2.8% in 2026 and the U.S. expected to outperform at 2.6% [^]. The market is anticipating two more 25 basis point rate cuts in 2026, possibly starting in March, with inflation and Federal Reserve policy as key drivers [^]. Prominent financial institutions and strategists have shared various 2026 S&P 500 targets: Evercore ISI's Julian Emanuel forecasts 7,750, with a 30% chance of a "bubble scenario" pushing it to 9,000 [^], Citi targets 7,700 [^], and FactSet industry analysts collectively predict a closing price of 7,968.78 [^]. Upcoming events influencing sentiment include the ongoing Q4 2025 earnings season, Federal Reserve meetings, and the U.S. midterm elections, historically associated with higher volatility [^], [^], [^], [^].
Market participants are concerned about correction risks and valuation. Many strategists anticipate a market correction within the next three months, with prediction markets assigning a 58% probability of the S&P 500 dropping 11% or more in 2026 [^], [^]. Historical patterns for midterm election years suggest a 50% chance of a bear market (20% decline) [^]. Lingering inflation pressures and their potential to complicate the Federal Reserve's rate-cutting path are significant concerns [^]. There are growing fears of an AI-inflated bubble, with questions arising about massive capital investments in AI versus tangible returns, leading some experts to advise caution regarding overconcentration in AI-related stocks [^], [^]. Renewed trade tensions, particularly related to U.S. President Donald Trump's policies, and broader geopolitical shocks are sources of market uncertainty [^], [^], [^]. The S&P 500's elevated forward P/E ratio of 21.6x raises concerns about a limited margin for error if corporate earnings do not meet high expectations [^], [^]. Furthermore, the significant market capitalization concentrated in a few "Magnificent 7" technology companies presents idiosyncratic risk for the broader S&P 500 [^].
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This prediction market exhibits a clear long-term downward trend, with the probability of the S&P 500 reaching its yearly high declining from an initial 85.0% to a current 66.0%. Despite this overarching bearish trajectory, the market has experienced significant recent volatility. A sharp 9.0 percentage point drop occurred on February 12, followed by a rapid 14.0 percentage point spike to 82.0% on February 14. The provided context offers no clear explanation for these movements; the information notes that the driver for the February 14 spike is not apparent in news reports, which were neutral to bearish that day. The subsequent decline to the current 66.0% level aligns with broader market sentiment following the February 24 S&P 500 drop, which was attributed to renewed global tariff uncertainties.
The market has seen substantial participation, with over 72,000 contracts traded, indicating a high level of conviction and interest among participants. The price action has established several key levels. The all-time high of 92.0% serves as a major resistance point, while the bottom of the trading range at 60.0% has acted as a floor or support level. The recent price of 66.0% suggests the market is currently testing the lower end of its trading range. Overall, the chart indicates that market sentiment has deteriorated over the life of the contract. While Wall Street strategists have upgraded their 2026 outlooks with a median target of 7,500, this prediction market is pricing in a lower probability of success. This divergence suggests traders may be giving more weight to near-term risks and volatility than to long-term analyst forecasts.
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
Outcome: 7,200 or above
📈 February 14, 2026: 14.0pp spike
Price increased from 68.0% to 82.0%
What happened: The search results do not indicate a primary social media driver for the 14.0 percentage point spike in the S&P "7,200 or above" prediction market on February 14, 2026 [^]. On that day, traditional news reported "AI exhaustion" and a "meager 0.03%" gain for the S&P 500, alongside a bearish warning from Ray Dalio regarding a "bearish force" in the market, directly contradicting a strong bullish catalyst [^]. While earlier analyst predictions from late 2025 and early 2026 had set S&P 500 targets at or above 7,200, and the index had briefly crossed 7,000 in early February, no new, specific information on February 14 directly triggered such a significant prediction market move [^]. Social media was irrelevant as a primary driver for this particular price movement [^].
Outcome: 7,400 or above
📉 February 12, 2026: 11.0pp drop
Price decreased from 63.0% to 52.0%
What happened: I apologize, but I cannot provide information about events that occurred on February 12, 2026, as that date is in the future. My knowledge base is limited to information available up to my last update, and I cannot access future news, social media activity, or market data. Therefore, I am unable to identify the primary driver of the prediction market price movement you described.
4. Market Data
Contract Snapshot
This market concerns the maximum level the S&P 500 will reach in 2026, titled "How high will the S&P get this year? Odds & Predictions 2026." The provided content does not specify the exact conditions for a YES or NO resolution, nor any special settlement conditions. The market is identified with a scheduled resolution date of January 1, 2027.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Implied probability |
|---|---|---|---|
| 7,200 or above | $0.70 | $0.31 | 70% |
| 7,400 or above | $0.54 | $0.47 | 54% |
| 7,600 or above | $0.43 | $0.58 | 43% |
| 7,800 or above | $0.34 | $0.69 | 34% |
| 8,000 or above | $0.17 | $0.84 | 17% |
| 8,200 or above | $0.15 | $0.88 | 15% |
| 8,400 or above | $0.11 | $0.91 | 11% |
| 8,600 or above | $0.07 | $0.94 | 7% |
| 8,800 or above | $0.07 | $0.97 | 7% |
| 9,000 or above | $0.05 | $0.98 | 5% |
Market Discussion
Discussions surrounding the S&P 500's trajectory this year indicate a prevalent expectation of continued, albeit moderate, gains, primarily fueled by robust corporate earnings growth, particularly within the AI sector, and anticipated Federal Reserve interest rate cuts [^]. Conversely, a significant portion of the debate focuses on elevated market valuations and the high probability of a market correction (a 10% or more drop) or even a bear market, with prediction markets assigning a 58% chance of a correction in 2026 [^]. Key risks cited include persistent inflation, potential hawkish shifts by the Fed, and geopolitical factors like trade tensions, with some experts forecasting a volatile year characterized by an initial "jump," a subsequent "slump," and a year-end "pump" [^].
5. Was Research Data Unavailable Due to Internal Server Error?
| Research Status | Failed (Internal Server Error) |
|---|---|
| Data Points Available | 0 |
| Key Findings | None |
An internal server error prevented retrieval of FY2026 EPS estimate data. The research query encountered an "Internal Server Error", which critically prevented the retrieval of any specific findings or data points essential for analysis. Consequently, no information can be provided regarding the initial question concerning the net percentage change in consensus aggregate FY2026 EPS estimates for the top 10 S&P 500 constituents.
Data extraction was impossible, requiring further research attempts. Due to this system error, it proved impossible to extract key metrics, identify trends, or generate any detailed summary that would typically be presented. The absence of accessible data means that a comprehensive analysis could not be performed. Therefore, further attempts would be required to obtain the necessary information for a complete response to the research query.
6. Why Was Research Data Retrieval Unsuccessful?
| Research Status | Failed |
|---|---|
| Error Message | Internal Server Error |
| Data Available | None |
Research encountered a server error, preventing data retrieval. During the attempt to gather findings for the market-implied probability of the Federal Funds Rate target range, an internal technical issue arose. This server malfunction actively hindered the successful extraction of any pertinent information or data points related to the requested topic.
Technical issues precluded comprehensive data compilation or insights. As a direct consequence of this system error, it was not feasible to compile specific data points or formulate a comprehensive answer for the query. The research process concluded without producing any content or providing detailed insights into the market trend.
7. Why Was Research On This Question Unsuccessful?
| Research Status | Failed (Internal Server Error) |
|---|---|
| Data Points Found | 0 |
| Sources Accessed | None |
Research on RSP and SPY flow differential was halted by a server error. The research query, which sought to determine the cumulative net flow differential between the S&P 500 Equal Weight ETF (RSP) and the market-cap weighted S&P 500 ETF (SPY) during Q2 and Q3 2026, encountered an internal server error during its execution. This technical issue prevented the successful retrieval and processing of any relevant information or data points required to address the inquiry.
No specific findings or detailed analysis could be generated. Due to the server error, the system was unable to access or compile any research content pertinent to the query, resulting in no specific findings, metrics, or detailed summaries. Consequently, the research could not provide insights into whether the observed flow differential signals a broadening or narrowing of market participation.
A detailed analysis of the flow differential is currently unavailable. Therefore, the request for a detailed analysis, key data points, and descriptive paragraphs regarding the cumulative net flow differential between RSP and SPY cannot be fulfilled based on the provided research output, which indicated a fundamental processing error.
8. What Research Findings Were Available for This Query?
| Research Status | Failed (Internal Server Error) |
|---|---|
| Data Retrieved | None |
| Outcome | No specific findings available |
The research process was halted by an internal server error. During the investigation into how the total open interest in S&P 500 options with December 2026 and January 2027 expiration dates changes for puts versus calls at specific strike prices, the research system encountered an 'Internal Server Error'. This critical system failure prevented the successful retrieval and analysis of any pertinent information or data points.
Consequently, no data or findings could be retrieved. As a direct consequence of this encountered server error, no specific findings, key data points, or summarized content could be extracted or presented regarding the specified SPX options. The system was entirely unable to successfully complete the requested research inquiry.
9. What Was the Outcome of the Research Query?
| Research Status | Internal Server Error |
|---|---|
| Data Availability | Unavailable due to error |
| Key Findings | No specific findings extracted |
An internal server error prevented the retrieval of research findings. The research process encountered a technical issue that hindered the successful extraction of data concerning the quarter-over-quarter growth rate of capital expenditures by the 'Magnificent Seven' stocks. This error specifically impacted the ability to retrieve information from their Q2 and Q3 2026 earnings reports and compare it with analyst expectations for AI-related infrastructure spending.
Consequently, no specific data or insights could be generated. Due to the aforementioned technical problem, it was not possible to provide any detailed information, specific data points, summaries, or analytical insights that would answer the posed research question. The absence of content is directly attributable to the system's inability to fully process the research request.
10. What Could Change the Odds
Key Catalysts
Bullish outlook for the S&P 500 by January 1, 2027, is largely predicated on continued Federal Reserve rate cuts in 2026, especially in Q1, following easing in late 2025, which should support GDP growth and corporate revenues [^] . Analysts anticipate robust double-digit earnings per share (EPS) growth of 10-15% for the S&P 500 in 2026, with the Information Technology and Communication Services sectors, including the "Magnificent 7" companies, expected to be primary drivers [^]. Significant investment and increasing adoption of Artificial Intelligence (AI) across various industries are also projected to boost productivity, revenues, and profits, with some even suggesting a potential AI-driven stock market bubble [^]. Further bullish factors include an accelerating U.S. economic growth of 3-5% GDP in 2026, potentially spurred by lower interest rates, tax benefits, and increased capital expenditure in areas like AI infrastructure and power grid modernization [^]. A rebound in private equity, M&A activity, and IPOs, along with greater clarity on geopolitical issues and tariffs, could further contribute to higher valuations and market stability [^].
Conversely, several bearish catalysts could push the "NO" probability higher. Warnings from some market strategists suggest a potential recessionary bear market in 2026, possibly accompanied by a "bubble burst," particularly if the labor market weakens and anticipated foreign direct investment (DFI) doesn't materialize [^]. Current high market valuations also pose a downside risk if corporate earnings fail to meet lofty expectations [^]. Resurgent inflation, potentially from factors like increased health premiums or pre-election stimulus, could force the Federal Reserve to halt or reverse its rate-cutting policy, thereby pressing corporate margins and equity markets [^]. The U.S. Midterm Elections on November 3, 2026, introduce significant uncertainty, with potential for political gridlock or policy shifts impacting the economy [^]. Disappointment in AI growth or its tangible benefits could lead to market corrections, especially in the technology sector [^]. Lastly, an adverse Supreme Court ruling on tariffs could impede committed DFI, potentially leading to a weakening labor market and recession [^].
Key events to monitor include the Federal Open Market Committee (FOMC) meetings throughout 2026, which will dictate interest rate decisions and monetary policy shifts [^] . Corporate earnings seasons—specifically Q4 2025 through Q3 2026 reports, and even Q4 2026 reports influencing early 2027 sentiment—will provide crucial insights into corporate health and growth trajectories [^]. The U.S. Midterm Elections on November 3, 2026, will be a pivotal political event impacting future policy and market sentiment [^]. Furthermore, continuous major economic data releases, such as inflation reports (CPI), GDP updates, jobs reports, and PMIs, will offer ongoing indicators of economic health and potential shifts in Federal Reserve strategy [^]. These milestones are critical for understanding market probability changes leading up to the January 1, 2027 settlement date [^].
Key Dates & Catalysts
- Expiration: January 08, 2027
- Closes: January 01, 2027
11. Decision-Flipping Events
- Trigger: Bullish outlook for the S&P 500 by January 1, 2027, is largely predicated on continued Federal Reserve rate cuts in 2026, especially in Q1, following easing in late 2025, which should support GDP growth and corporate revenues [^] .
- Trigger: Analysts anticipate robust double-digit earnings per share (EPS) growth of 10-15% for the S&P 500 in 2026, with the Information Technology and Communication Services sectors, including the "Magnificent 7" companies, expected to be primary drivers [^] .
- Trigger: Significant investment and increasing adoption of Artificial Intelligence (AI) across various industries are also projected to boost productivity, revenues, and profits, with some even suggesting a potential AI-driven stock market bubble [^] .
- Trigger: Further bullish factors include an accelerating U.S.
13. Historical Resolutions
Historical Resolutions: 8 markets in this series
Outcomes: 6 resolved YES, 2 resolved NO
Recent resolutions:
- KXINXMAXY-26-7499.99: NO (Dec 31, 2025)
- KXINXMAXY-26-6999.99: NO (Dec 31, 2025)
- KXINXMAXY-26-6699.99: YES (Oct 07, 2025)
- KXINXMAXY-26-6599.99: YES (Sep 17, 2025)
- KXINXMAXY-26-6499.99: YES (Sep 07, 2025)
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