Many Wall Street equity research analysts tout the possible inclination of the Federal Reserve to lower the Federal Funds Rate and thus interest levels in the US economy under incoming Governor of The Federal Reserve Kevin Warsh and realization of strong productivity gains due to artificial intelligence, AI as a reason for the S&P 500 to clock in a fourth year of the ongoing bull market.
Yes, lower interest rateswill provide cheap capital for firms, while artificial intelligence, AI could improve drastically the productivity of firms and thus raise US GDP by close to 4 % in the positive case,
A 2026 bull market is not certain, though, according to Wolfteam Ltd.'s projections and estimates.
Another AI competition scare like the Chinese DeepSeek in 2025, excessive valuation concerns, lower Federal reserve balance sheet assets value or lower productivity growth concerns could actually bring along a down year for the S&P 500.
The risks and positive perspectives seem tilted in favor of a positive outcome, with possible large negative reaction to a negative outcome.
The S&P 500 could rise between 7 % and 12 % in a probable scenario, according to Wolfteam Ltd.'s projections.
If, on the other hand a tightened financial conditions, financial credit or low AI productivity gains shock materializes, the S&P 500 could fall between 8 % and 19 % in 2026.
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