S&P 500 expected to stay bullish through 2026 amid strong earnings and easing geopolitical risks

The S&P 500 is projected to remain structurally bullish through 2026, supported by resilient fundamentals and easing geopolitical and inflation concerns. Key positive factors include potential resolution of U.S.-Iran tensions, normalization of the Strait of Hormuz, and a likely gridlocked U.S. Congress after midterm elections. Additionally, massive AI-driven investments by tech giants and strong earnings growth, with a 14.6% projected increase for 2026, underpin this outlook. Valuations near 21.8 times forward earnings are justified by expected double-digit earnings growth, with consensus price targets between 7,600 and 8,000 by the end of 2026.