Carson Group forecasts a continued hearty run for stocks in 2026, with a 12% to 15% gain in the S&P 500, based on surging investment in artificial intelligence and supportive fiscal and monetary policies.
“Carson Group remains bullish on the economy and markets, just as we have for the past three years,” Chief Market Strategist Ryan Detrick said. “We believe 2026 is all about riding the wave. Waves can crest and crash, but right now the underlying momentum argues for seeking participation, not bailing out. The cushion against a meaningful shock has improved and the American consumer and corporate balance sheets remain strong.”
A new "Riding the Wave" report from Carson Group cites three forces propelling markets: expansive fiscal policy — notably, retroactive tax cuts taking effect this year — a clear shift to monetary easing, and "unprecedented" AI investment. in AI. Carson remains optimistic despite some risks, such as higher unemployment.
"At just over 3 years old, this young bull is barely halfway through the average bull market cycle, and we could see continued solid gains in 2026 — though the year likely won’t be without its share of volatility," the report says.
Sonu Varghese, Carson's global macro strategist, said the new year brings "a wave of momentum in both markets and consumer spending. Policy tailwinds — ranging from tax cuts and continued Federal Reserve rate cuts to easing tariff pressures — could help lift cyclical activity toward trend growth."
Higher labor market risks increase the odds that monetary policy remains "decisively dovish," and historically high AI capital expenditures could propel further profit growth, Varghese said.
AI-related capex relative to gross domestic product is exceeding the internet boom, even in the technology's early stages, the firm said.
Carson also said its research shows economic activity in developed markets throughout Europe, Japan and Australia is running above trend, while emerging markets are rebounding.
While the firm anticipates another year of economic expansion, Carson recommends portfolio exposure to both low-volatility and momentum stocks, international equities and some asset classes other than stocks and bonds, such as managed futures and gold.
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