The Market Is Underestimating These 3 Risks in 2026

• S&P 500 forecast for 2026 is a trading range of 6500 (bear case) to 7500 (bull case), with the lower end more likely in the first half.
• Key risks include geopolitical volatility (Iran, Greenland push), stretched price-earnings ratios, and slowing economic growth due to declining payroll and hourly wage growth.
• The 'K-shaped economy' is deemed unsustainable, potentially leading to populist electoral changes and impacts on tax codes and corporate earnings.
• Big tech companies (e.g., Apple) are currently the only ones earning substantially above their cost of capital, but their capital-intensive AI spending and high index concentration pose risks.
• Investors are advised to manage risk by hedging offensive tech positions with defensive stocks (food, beverage, tobacco, waste stocks).

Barry Bannister of Stifel forecasts a challenging 2026 for the S&P 500, expecting a trading range between 6500 and 7500. He highlights significant downside risks from geopolitical tensions, economic fragility, and stretched valuations, advising investors to hedge concentrated tech positions with defensive sectors.