As 2025 draws to a close with the S&P 500 notching its third consecutive year of double-digit gains, Wall Street's outlook for 2026 is remarkable not for what strategists are predicting—but for what no one is predicting.

For the first time in living memory, not a single major Wall Street strategist has issued a bearish call for the year ahead. The unanimous bullishness has caught the attention of at least one veteran market watcher who believes the consensus itself may be the most important signal of all.

The Numbers Behind the Optimism

The bulls have plenty of data supporting their views. The S&P 500 is closing 2025 with roughly a 17% gain, following a 23% rise in 2024 and a 24% surge in 2023. This three-year streak of double-digit returns has occurred only five times since the 1940s.

JPMorgan Chase is among the most optimistic, forecasting S&P 500 gains of 13% to 15% for 2026. The bank's strategists point to robust corporate earnings growth, continued AI investment, and the potential for the index to surpass 8,000 if the Federal Reserve continues easing monetary policy.

Vanguard's baseline expectation sees U.S. equity returns potentially reaching 8% in 2026, with the investment giant noting that "strong AI capital investment and a strong wealth effect could easily push the U.S. economy toward 3% growth."

The Contrarian Red Flag

But the lack of any bearish voices has Julian Emanuel, chief equity strategist at Evercore ISI, sounding a note of caution.

"For the first time in our memory, there is not one single strategist making a bearish call for 2026."

— Julian Emanuel, Evercore ISI

Emanuel's observation cuts to the heart of contrarian investing. When every professional on Wall Street agrees, it often means the trade has become too crowded—and too obvious.

History offers cautionary tales. In late 1999, virtually no major strategist predicted the dot-com crash that would erase trillions in market value. In 2007, few saw the financial crisis coming. The best-performing market calls often come from those willing to stand apart from the crowd.

What Could Go Wrong

The risks that could upend the bullish consensus are not hard to identify:

  • Tariff escalation: President Trump's tariff policies have already pushed the average effective tariff rate to 11.2%—the highest since 1943. Further escalation could spark inflation and hurt corporate margins.
  • Fed policy missteps: The Federal Reserve's December rate cut drew three dissenting votes, the most since 2019. A more hawkish turn could catch markets off guard.
  • AI disappointment: The AI boom has driven much of the market's gains. Any sign that monetization is lagging investment could trigger a sharp correction in tech-heavy sectors.
  • Geopolitical shocks: Rising tensions in the Middle East and continued uncertainty around Taiwan present tail risks that could roil markets.

The Valuation Concern

Adding to potential concerns, the Shiller CAPE ratio—a measure of market valuation that compares prices to a 10-year average of earnings—has climbed to levels seen only once before: during the dot-com bubble of the late 1990s.

Vanguard has taken note, tempering its long-term outlook even as it remains constructive on 2026. The firm projects average annual returns of just 4% to 5% for U.S. stocks over the next five to ten years, a stark contrast to the recent streak of exceptional performance.

What Investors Should Consider

The unanimous bullishness doesn't mean stocks will crash in 2026. Markets can remain irrational—or rational—longer than skeptics expect. But the consensus does suggest that good news is largely priced in, leaving less room for positive surprises and more vulnerability to disappointment.

For investors, the message may be less about timing the market and more about positioning portfolios for multiple scenarios:

  • Maintain diversification across asset classes and geographies
  • Consider value stocks and international equities, which Vanguard sees as offering better risk-adjusted returns
  • Keep some dry powder for opportunities if volatility returns
  • Focus on quality companies with strong balance sheets that can weather unexpected turbulence

As 2026 begins, Wall Street's unified optimism may prove prescient—or it may serve as a reminder that the most dangerous risks are often the ones nobody is watching for.