Wall Street Says the Stock Market's Return in 2026 Will Beat the 30-Year Average

Nearly 5,500 companies were listed across U.S. stock exchanges as of the first quarter of 2026, according to the Security Industry and Financial Markets Association (SIFMA). Of those companies, the 500 largest ones that are domiciled in the U.S. are included in the S&P 500 (SNPINDEX: ^GSPC), an index that is generally synonymous with the domestic stock market.

Read on to learn how the S&P 500 performed over the last 30 years, and what Wall Street expects from the benchmark index in 2026.

Image source: Getty Images.

The S&P 500 returned 8.3% annually over the last 30 years (excluding dividends)

The S&P 500 was created in March 1957. The index is considered the best benchmark for the U.S. stock market because it measures the performance of 500 large companies that account for more than 80% of domestic equities by market value.

Inclusion is ultimately at the discretion of a selection committee, but companies cannot be considered unless they meet certain eligibility criteria, such as generally accepted accounting principles (GAAP) profitability, sufficient liquidity, and a minimum market value of $22.7 billion.

The index is updated during quarterly rebalancing events, which happen on the third Friday of March, June, September, and December. Coherent, EchoStar, Lumentum, and Vertiv joined the index in March. However, companies can be added at any time. Casey's General Stores was added to the S&P 500 in April to fill a vacancy created when Hologic was acquired by a private equity firm.

The S&P 500 is most heavily weighted toward technology stocks. The 10 largest positions in the index are listed by weight below:

1. Nvidia: 8.1%
2. Apple: 6.6%
3. Alphabet: 5.8%
4. Microsoft: 5.3%
5. Amazon: 4.1%
6. Broadcom: 3.3%
7. Meta Platforms: 2.4%
8. Tesla: 1.8%
9. Berkshire Hathaway: 1.4%
10. JPMorgan Chase: 1.4%

Excluding dividends, the S&P 500 has advanced 997% (8.3% annually) during the last 30 years. But including dividends, the index achieved a total return of 1,800% (10.3% annually) over the same period. Given the lengthy nature of that window, investors can reasonably expect similar returns over long periods in the future.

Wall Street analysts expect the S&P 500 to advance 11.8% in 2026

Wall Street analysts expect S&P 500 companies' earnings to increase 19.7% in 2026, an acceleration from 14% in 2025, according to LSEG. Factors contributing to faster earnings growth include the corporate tax breaks codified by President Donald Trump's "big, beautiful bill" and robust spending on artificial intelligence (AI) infrastructure.

In turn, many Wall Street analysts expect a strong performance from the S&P 500 in the remaining months of 2026. The chart below provides a consolidated view of where various research organizations and investment banks think the index will finish the year. The chart also shows the implied upside (or downside) versus the S&P 500's current level of 7,108.

Data sources: Reuters, Yahoo Finance.

The chart above suggests the S&P 500 is headed higher in the remaining months of 2026. The median forecast from 21 Wall Street investment banks and research institutions says the index will finish the year at 7,650, implying 8% upside from its current level of 7,108.

So what? The S&P 500 started the year at 6,845, so Wall Street's median forecast implies the index will add 11.8% in 2026. That is 3.5 percentage points higher than the 30-year average.

Of course, there are plenty of risks to the downside, the most pressing of which is the Iran conflict. If oil prices remain elevated, economic growth could slow and S&P 500 earnings could miss estimates. In that scenario, the stock market could perform much worse than Wall Street anticipates.

Citigroup is an advertising partner of Motley Fool Money. HSBC Holdings is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Wells Fargo is an advertising partner of Motley Fool Money. Trevor Jennewine has positions in Amazon, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Coherent, Evercore, Goldman Sachs Group, JPMorgan Chase, Jefferies Financial Group, Lumentum, Meta Platforms, Microsoft, Nvidia, Tesla, and Vertiv. The Motley Fool recommends Barclays Plc, Casey's General Stores, HSBC Holdings, and London Stock Exchange Group Plc. The Motley Fool has a disclosure policy.