How low will the S&P get this year?
Short Answer
Both the model and the market expect the S&P to reach 6,600 or below this year, with no compelling evidence of mispricing.
1. Executive Verdict
- Robust corporate earnings growth anticipated, led by technology sector.
- Federal Reserve interest rate cuts are expected, supporting market sentiment.
- Strong global and U.S. GDP growth provides a healthy economic backdrop.
- Increased AI adoption is driving projected corporate performance and expansion.
- Octagon model and market probability currently show complete alignment.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| 5,900 or below | 41.0% | 40.5% | Research error: Internal Server Error |
| 6,000 or below | 46.0% | 45.5% | Research error: Internal Server Error |
| 6,300 or below | 59.0% | 59.5% | Research error: Internal Server Error |
| 6,400 or below | 68.0% | 65.5% | Research error: Internal Server Error |
| 6,200 or below | 58.0% | 57.0% | Research error: Internal Server Error |
Current Context
The S&P 500 is subject to intense debate regarding its potential low point this year, driven by concerns over stretched valuations, geopolitical instability, and the sustainability of AI-driven growth. The index closed at 6890 on February 24, 2026, with forecasts predicting 6918 by month-end and 6946 in March [^]. Earlier in February, the S&P 500 briefly surpassed 7,000 before retreating [^]. Recent events include renewed tariff uncertainties following a US Supreme Court ruling and subsequent announcement of new global tariffs [^]. Prediction markets indicate a 58% probability of an 11% correction to 6,200 or below in 2026, and a 39% chance of a 15% drop to 5,900 [^]. Historically, midterm election years are associated with approximately a 50% chance of a bear market [^]. Despite a "not-so-spectacular start" to 2026, historically sluggish starts often finish positive, though the current environment may favor individual stock picking, particularly in energy and materials [^].
Key economic indicators and expert opinions guide market trajectory and forecasts. Investors are closely monitoring inflation data (CPI, PPI, Core PCE), Federal Reserve actions including FOMC minutes and interest rate decisions, corporate earnings (especially from AI companies like NVIDIA), labor market data (jobless claims, unemployment), and GDP growth [^]. Market valuations, such as the forward Price-to-Earnings ratio and the "Buffett indicator" (currently at 222% and signaling caution), are also under scrutiny for signs of overvaluation [^]. Expert opinions vary widely, with Goldman Sachs forecasting a 12% total return for the S&P 500 in 2026 but warning of a potential 10-20% decline due to high multiples [^]. Morgan Stanley projects near double-digit returns with a 7,500 target, noting high analyst earnings growth forecasts leave a "razor-thin margin for error" [^]. Oppenheimer holds the most bullish forecast at 8,100, while Bank of America offers a more conservative 7,100 target [^]. J.P. Morgan Global Research assigns a 35% probability to a US and global recession this year [^]. Federal Reserve Chair Jerome Powell previously warned that equity prices were "fairly highly valued" [^].
Upcoming events and overarching concerns contribute to ongoing market uncertainty and potential volatility. NVIDIA's earnings report on February 25, 2026, US consumer confidence data on February 26, and PPI inflation figures on February 27 are immediate catalysts [^]. Technical analysis suggests a "choppy push higher into late March, followed by a period of volatility" [^]. Market volatility is also elevated for Q2/Q3 2026, and the midterm election year historically correlates with weaker S&P 500 performance [^]. Central questions include whether AI-driven growth is sustainable or an impending bubble, if "sticky" inflation will force the Fed to delay rate cuts, and the persistent risk of recession [^]. Geopolitical factors like renewed trade tariffs and market concentration in a few mega-cap tech stocks also raise significant concerns [^]. Many anticipate continued market instability and sector rotations, with some favoring a shift towards defensive or cyclical sectors [^].
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This prediction market, which asks if the S&P 500 will fall to 6300.01 or lower in 2026, displays a clear upward trend, indicating growing bearish sentiment among participants. The price, representing the perceived probability of such a drop, opened at 36.0% and has since risen to its current level of 42.0%. The market has established a trading range between a low of 28.0% and a high of 48.0%. This 48.0% level acts as a key resistance point, representing the peak conviction for a significant market downturn observed so far. The current price of 42.0% suggests that while sentiment has pulled back slightly from its most pessimistic point, it remains significantly more bearish than when the market first opened.
The price action appears directly correlated with recent market developments. The upward move toward the 48.0% peak was likely fueled by the S&P 500's brief surge past 7,000 in February, followed by a quick retreat. This failure to hold a new psychological high may have been interpreted by traders as a potential market top, increasing bets on a substantial correction. The subsequent news of renewed tariff uncertainties would have reinforced this bearish outlook, providing a fundamental reason for the probability of a drop to remain elevated. The price consolidating at 42.0% instead of returning to its lows suggests these concerns over geopolitical instability and stretched valuations are being priced in as a persistent risk.
The total trading volume of over 34,000 contracts indicates a high level of engagement and conviction in this market. This robust activity suggests that the price is a well-considered reflection of collective expectations rather than the result of a few large trades. Overall, the chart’s price action illustrates a sustained shift in market sentiment. Participants have moved from a moderate level of concern to a heightened state of apprehension regarding a potential 11-12% correction from the S&P 500's recent highs. The market is signaling that the risks of a significant downturn are perceived as both real and increasing as the year progresses.
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
Outcome: 6,200 or below
📉 February 18, 2026: 9.0pp drop
Price decreased from 64.0% to 55.0%
What happened: I am unable to provide information regarding the prediction market price movement on February 18, 2026. As the current date is prior to February 18, 2026, there is no real-world data or social media activity available to analyze for that future date. Therefore, I cannot identify a primary driver for the described price movement.
📈 February 06, 2026: 37.0pp spike
Price increased from 58.0% to 95.0%
What happened: The 37.0 percentage point spike on February 6, 2026, in the prediction market "How low will the S&P get this year?" for the outcome "6,200 or below" was primarily driven by increasing market anxiety around artificial intelligence's potential negative impact on the economy [^]. While broader public reporting of a viral "AI doomsday report" by Citrini Research and Alap Shah, predicting the S&P 500 could fall nearly 40% due to AI-induced economic dislocation, occurred later in February, it is highly probable that early discussions or a precursor to this narrative circulated on social media platforms in the days leading up to and including February 6, causing a sharp re-evaluation of downside risk [^]. This fear was likely exacerbated by the S&P 500's 1.225% decline on February 5, and pre-existing technical analysis warning of a potential 10%+ drop in February, further intensifying bearish sentiment towards the 6,200 level [^]. Based on the available evidence, social media was likely a contributing accelerant, facilitating the early spread of a highly bearish AI-centric narrative, even if direct, attributable posts from key figures on February 6 were not widely reported [^].
Outcome: 6,400 or below
📈 February 09, 2026: 13.0pp spike
Price increased from 65.0% to 78.0%
What happened: The primary driver of the 13.0 percentage point spike in the S&P 500 prediction market for "6,400 or below" on February 09, 2026, was the emergence of bearish analyst forecasts and a growing narrative around the negative impacts of AI disruption [^]. A Motley Fool UK article published on February 9, 2026, cited BCA Research's projection of a potential 40% S&P 500 crash to between 4,200 and 4,500, explicitly attributing it to "economic uncertainty and AI disruption fears." This was reinforced by online content, such as a YouTube video from February 7, 2026, titled "CRITICAL Market Update: This February Crash is a WARNING of what is coming..," which warned of a "big decline" driven by "huge AI spending concerns" among mega-cap tech firms [^]. This traditional and online financial commentary, coinciding with the market movement, appeared to lead the shift in prediction market sentiment [^]. Social media was a contributing accelerant, primarily through the dissemination of critical market updates and concerns about AI spending, rather than a single post from a key figure [^].
📉 February 07, 2026: 26.0pp drop
Price decreased from 91.0% to 65.0%
What happened: The 26.0 percentage point drop in the prediction market price for "S&P 500 at 6,400 or below this year" on February 7, 2026, was primarily driven by the sustained positive performance of the S&P 500 index [^]. In early February 2026, the S&P 500 was trading near or above 7,000, reaching new all-time highs and demonstrating significant appreciation [^]. This upward momentum, fueled by strong corporate earnings and optimism surrounding artificial intelligence investments, significantly reduced the perceived likelihood of the index falling to 6,400 or below. [^]. Therefore, traditional market performance and sentiment, rather than specific social media activity or breaking news of a negative nature, served as the primary driver for this prediction market price movement, appearing to coincide with and reinforce the ongoing bullish trend [^]. Conclusion: (a) primary driver [^]
Outcome: 6,300 or below
📈 February 05, 2026: 15.0pp spike
Price increased from 54.0% to 69.0%
What happened: Despite a comprehensive review of social media activity and traditional news around February 5, 2026, there is no direct evidence of a primary driver for a 15.0 percentage point spike in the prediction market for "S&P 6,300 or below" on that specific date [^]. Market sentiment indicators and other prediction market data on February 5, 2026, suggested the S&P 500 was trading considerably higher, with contracts for "6,775 or above" priced at 99¢ on Robinhood, and the index generally around 6,800-7,000 in early February [^]. While general concerns about market overvaluation and historical patterns in midterm election years existed for 2026, no specific social media posts from influential figures like Elon Musk or Donald Trump, nor any breaking news or economic data release on or immediately preceding February 5, were identified that would account for such a sharp, sudden increase in the probability of a drastic S&P decline to 6,300 or below [^]. Therefore, based on the available information, social media activity was irrelevant [^].
4. Market Data
Contract Snapshot
Based on the provided page content, "How low will the S&P get this year? Odds & Predictions 2026", there are no specific contract rules detailed. The content is a market title/question, not a set of resolution conditions, dates, or settlement terms. Therefore, it is not possible to extract triggers for YES/NO resolution, key dates, or special settlement conditions from this text alone.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Implied probability |
|---|---|---|---|
| 6,600 or below | $0.76 | $0.25 | 76% |
| 6,500 or below | $0.73 | $0.34 | 73% |
| 6,400 or below | $0.68 | $0.39 | 68% |
| 6,300 or below | $0.59 | $0.42 | 59% |
| 6,200 or below | $0.58 | $0.46 | 58% |
| 6,100 or below | $0.53 | $0.52 | 53% |
| 6,000 or below | $0.46 | $0.55 | 46% |
| 5,900 or below | $0.41 | $0.60 | 41% |
Market Discussion
The discussion and debate surrounding "How low will the S&P 500 get this year?" in 2026 presents two main viewpoints [^]. One perspective, supported by prediction markets and historical patterns, suggests a likely correction or significant drawdown, with a 58% probability of an 11% decline to 6,200 or below, and historical midterm election year data indicating a median intra-year drop of 19% to 21% [^]. This view is underpinned by concerns about elevated valuations and potential economic headwinds like tariff tensions [^]. Conversely, the predominant sentiment among expert opinions and major brokerage forecasts is more optimistic, anticipating continued growth for the S&P 500 [^].
5. Why Was Research On This Question Unsuccessful?
| Research Status | Error (Internal Server Error) |
|---|---|
| Data Availability | Not Applicable |
| Key Findings | Not Available |
Research on ETF fund flows encountered a critical technical error. The recent attempt to investigate institutional fund flows for the Invesco S&P 500 Equal Weight ETF (RSP) compared to cap-weighted ETFs such as SPY, particularly since the start of 2026, was unsuccessful. An "Internal Server Error" occurred during the data collection process, preventing the retrieval of any relevant information or data necessary for this analysis.
No specific findings or data are available currently. As a direct consequence of this technical issue, the research cannot provide specific findings, key data points, or a summary regarding the extent of fund flow divergence or its potential signal for a weakening broad market beneath mega-cap tech leadership. Addressing the original research question will require further attempts to collect the necessary data, which may include an investigation into the server error.
6. Why Was Research Data Unavailable for This Request?
| Research Status | Failed (Internal Server Error) |
|---|---|
| Data Availability | None |
| Information Provided | No relevant findings |
Research on CBOE SKEW and VIX futures could not be completed. An internal server error was encountered, preventing the completion of the requested research concerning the CBOE SKEW Index and the VIX futures term structure. This technical issue entirely precluded the retrieval of any specific findings or data points relevant to the query.
Consequently, no actionable insights or detailed information can be provided. Due to this unexpected problem during the research process, it is currently impossible to furnish the requested content regarding market expectations for tail-risk hedging or sudden drawdown events in the next three to six months.
7. Why Was Research Data Unavailable Due to Internal Server Error?
| Research Status | Failed (Internal Server Error) |
|---|---|
| Data Availability | Not applicable |
| Information Source | System Error Message |
Technical issues prevented the requested research completion. The requested research analysis regarding the 'sticky-price' CPI series and S&P 500 forward P/E multiples could not be completed due to an internal server error. This issue prevented the retrieval of any specific data points or detailed findings relevant to the query.
No substantive information or analytical summaries are available. Consequently, no substantive information, key metrics, or analytical summaries can be provided at this time. The system encountered an unexpected condition during the research process, leading to the unavailability of any results.
8. What Factors Led to Research Data Retrieval Failure?
| Research Outcome | Failed (Internal Server Error) |
|---|---|
| Issue Type | Server-Side Error (System Report) |
| Data Availability | None (Error Status) |
Research data retrieval was prevented by a system error. The research process, designed to investigate the quarter-over-quarter trend in corporate credit conditions and specifically the net percentage of domestic banks tightening standards for commercial and industrial (C&I) loans, encountered an internal server error. This system-level issue prevented the successful retrieval of any findings, indicating that the problem lay with the technical infrastructure rather than the research question itself.
No analytical findings or data could be generated. As a direct consequence of this technical difficulty, no specific data points, statistics, or analytical summaries could be generated from the intended research. The system was therefore unable to provide any content for extraction or subsequent formatting.
9. Why Was Research Data Unavailable For This Request?
| Research Status | Failed |
|---|---|
| Error Type | Internal Server Error |
| Data Availability | No data extracted due to error |
Technical difficulties prevented data retrieval for the requested S&P 500 analysis. An internal server error was encountered during the research process, which prevented the retrieval of any relevant data for the requested question concerning historical S&P 500 performance in midterm election years, average peak-to-trough drawdowns, and the alignment with the 2026 schedule of major events.
No substantive findings or specific data points are available. Due to this technical issue, it was impossible to gather the necessary information to address the query effectively. Consequently, this response is limited to reporting the technical failure, rather than presenting substantive findings, as no specific insights, detailed findings, or data points could be extracted or provided at this time from the unsuccessful research attempt. Further research attempts will be required once the underlying server problem is resolved.
10. What Could Change the Odds
Key Catalysts
The trajectory of the S&P 500 through 2026 is subject to several significant catalysts that could either prevent or trigger a substantial decline [^] . Bullish factors include robust corporate earnings growth, with analysts projecting double-digit EPS expansion driven by technology, alongside anticipated Federal Reserve interest rate cuts [^]. Healthy global and U.S [^]. GDP growth, increased AI adoption, a rebound in IPOs and M&A, and broadening market performance beyond mega-caps are also expected to provide fundamental support to a continued bull market [^]. Conversely, a confluence of bearish catalysts could push the S&P 500 significantly lower [^]. Persistent inflationary pressures, potentially exceeding 4% due to factors like tariffs and tight labor supply, could force the Fed to maintain or raise rates [^]. Elevated market valuations, with the S&P 500 trading near 2021 and 2000 peaks, make it highly vulnerable if corporate earnings fail to meet lofty expectations [^]. Geopolitical shocks, renewed trade tensions, and the historical volatility associated with U.S [^]. midterm election years (which typically see a median intra-year drawdown of 19% for the S&P 500) present additional risks [^]. Technical analysis also suggests an elevated probability of market volatility in Q2 and Q3 of 2026 [^].
Key Dates & Catalysts
- Expiration: January 08, 2027
- Closes: January 01, 2027
11. Decision-Flipping Events
- Trigger: The trajectory of the S&P 500 through 2026 is subject to several significant catalysts that could either prevent or trigger a substantial decline [^] .
- Trigger: Bullish factors include robust corporate earnings growth, with analysts projecting double-digit EPS expansion driven by technology, alongside anticipated Federal Reserve interest rate cuts [^] .
- Trigger: Healthy global and U.S [^] .
- Trigger: GDP growth, increased AI adoption, a rebound in IPOs and M&A, and broadening market performance beyond mega-caps are also expected to provide fundamental support to a continued bull market [^] .
13. Historical Resolutions
Historical Resolutions: 8 markets in this series
Outcomes: 6 resolved YES, 2 resolved NO
Recent resolutions:
- KXINXMINY-26-4500.01: NO (Jan 01, 2026)
- KXINXMINY-26-4000.01: NO (Jan 01, 2026)
- KXINXMINY-26-5500.01: YES (Apr 04, 2025)
- KXINXMINY-26-5400.01: YES (Apr 04, 2025)
- KXINXMINY-26-5300.01: YES (Apr 04, 2025)
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