5 Bold Predictions for the Stock Market in 2026

Each year for the past decade or so, I've written an article with bold predictions for the stock market and economy. With 2025 rapidly coming to a close, it's time for another installment, and to put it mildly, I think we're in for an interesting year.

Before we dive in, let's take a quick look at the bold predictions I made last year. I like to hold myself accountable and discuss what went right or wrong with these. So, without further delay, here's how my 2025 predictions went.

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• We'll get a full percentage point of Federal Reserve rate cuts. We still have one more Fed meeting to go, but it's looking as if we'll have a total of 0.75% of rate cuts for the year. Considering that the median expectation was for just one quarter-point rate cut at the start of the year, I'll call this a pretty accurate prediction.
• Small-cap stocks will outperform the S&P 500. The year isn't over yet, but the S&P 500 is about three percentage points ahead of the Russell 2000. In short, I underestimated how long-lasting the AI boom in mega-cap tech stocks would be.
• Real estate will be the best-performing S&P 500 sector. This one was just plain wrong.
• The S&P 500 will have a so-so year. As of Dec. 8, the S&P 500 is up by about 16% for the year. This is certainly lower than the 26% and 25% gains we saw in 2023 and 2024, respectively, but is still better than the historical average.
• Speculative stocks will rule the market. I specifically called out insurance tech company Lemonade (NYSE: LMND), which has more than doubled this year. Many other "speculative" companies like quantum computing businesses, have performed incredibly well. So, I'll call this an accurate prediction.

Not terrible, considering how outlandish some of these seemed at the beginning of the year. For example, the market was pricing in less than a 3% chance of a full percentage point of rate cuts, so that was a very bold prediction.

Five bold predictions for 2026

With that, let's get to my bold predictions for 2026. To be clear, these are bold predictions, so some might seem a bit unlikely. That's the point. But I think these are more likely than most experts believe.

1. Mortgage rates will approach 5%

The average 30-year mortgage rate is about 6.3% as of December 2025, and although most experts believe we'll see this fall a little, most projections from major real estate sources are in the 6% ballpark. I'll make the bold prediction that we'll see the average 30-year mortgage rate fall by a full percentage point or more in 2026.

2. The Russell 2000 will gain at least 20%

Simply put, lower interest rates favor small caps. Smaller companies tend to be more debt-reliant than their larger counterparts, and as money flows out of high-yield assets and into the stock market, small caps can be big beneficiaries. I'm not only predicting that small caps will outperform the S&P 500 in 2026, but that we'll see a total return of 20% or more from the Russell 2000.

3. We'll have at least five new trillion-dollar companies

As of this writing, there are 10 U.S.-listed companies with trillion-dollar market caps. But I'm predicting that at least five more will be added. I'll even go a step further and predict that Walmart (NYSE: WMT), Eli Lilly (NYSE: LLY), JPMorgan Chase (NYSE: JPM), and Visa (NYSE: V) will all be among the new members of the trillion-dollar club by the end of 2026.

4. The IPO market will smash records

The largest IPOs of all time were Saudi Aramco and Alibaba (NYSE: BABA), which raised $25.6 billion and $21.7 billion, respectively. I'll boldly predict that both of the generative AI giants -- OpenAI and Anthropic -- will go public in 2026. And I predict that both will shatter the previous records for capital raised in an IPO. It's also possible that we'll finally see SpaceX go public this year, and that could be a massive offering as well.

5. Bitcoin will reach $150,000

This might be my boldest prediction on the list. As of this writing, Bitcoin (CRYPTO: BTC) trades for about $90,000. But the regulatory environment is making it easier than ever for people to transact in cryptocurrency, and recent clarifications allow banks to act as crypto custodians. There are simply more tailwinds than downside risks right now, and I think we'll see a $150,000 Bitcoin price at some point in 2026.

I'll probably be wrong on some of these

To reiterate, these are intended to be bold predictions. I'm sure at least a couple of them will end up being wrong.

But the bottom line is that these are predictions that I believe have a higher likelihood of happening that Wall Street seems to think, and I have a pretty decent track record of getting at least some of them correct. I'll revisit these at the end of 2026 to hold myself accountable, and I'm excited to see how it goes!

JPMorgan Chase is an advertising partner of Motley Fool Money. Matt Frankel, CFP has positions in Lemonade and has the following options: short January 2026 $90 calls on Lemonade. The Motley Fool has positions in and recommends Bitcoin, JPMorgan Chase, Lemonade, Visa, and Walmart. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.