Stock Market Will Soar in 2026–Goldman Sachs

• The market rally is entering its fourth year after rising 17% in 2025, an unprecedented run in recent history
• Goldman Sachs analysts led by Ben Snider identify companies serving middle-income consumers as 'particularly attractive,' shifting focus away from expensive tech stocks
• Any market correction in 2026 is expected to be modest and temporary, with the market projected to finish the year at higher levels

Summary

Goldman Sachs predicts the U.S. stock market rally will continue through 2026, marking a potential fourth consecutive year of gains. The investment bank forecasts the market will surge, driven by a shift away from AI stocks toward healthcare providers, consumer goods, and "essential" consumer products sectors.

Key Figures and Projections:

• S&P 500 rose 17% in 2025
• Goldman projects 2.1% GDP growth in 2026
• Current index levels: S&P 500 at 6,921, Dow at 48,821, Nasdaq 100 at 25,638

Main Investment Thesis:

Goldman's team, led by Ben Snider, identifies middle-class consumer spending as the primary market catalyst. The bank argues consumer incomes will rise sufficiently to offset expenses, maintaining spending momentum. Sectors expected to lead include healthcare, essential consumer products, upscale goods, and casinos.

Market Implications:

This outlook challenges conventional wisdom about affordability constraints affecting consumer behavior. Goldman suggests any market corrections in 2026 will be temporary, with the market closing higher for the year. However, the bank warns that technology stocks may have become overvalued after their AI-driven rally.

Risks:

The analysis acknowledges the rally's unprecedented nature by historical standards, raising questions about sustainability. The firm cautions against excessive tech exposure while maintaining an overall bullish stance on broader market participation.

Goldman's forecast represents a significant vote of confidence in U.S. consumer resilience and suggests portfolio rotation toward consumer-facing sectors for 2026.