Not 'very hawkish at all': Wall Street optimistic on stock market rally in 2026 after Fed rate cut

Wall Street is progressively optimistic astir the banal marketplace heading into 2026 aft the S&P 500 (^GSPC) and Dow (^DJI) deed grounds highs successful the aforesaid week the Federal Reserve chopped involvement rates.

Adding to the momentum, highly anticipated comments from Chair Jerome Powell during the cardinal bank's property league pursuing its two-day argumentation gathering came crossed arsenic little hawkish than expected.

"I really thought helium was benignant of a chickenhawk successful his statement. I didn’t spot it arsenic precise hawkish astatine all,” David Waddell, CEO of Waddell & Associates, told Yahoo Finance.

Waddell noted that President Trump volition question to regenerate Powell, whose word ends successful May, with idiosyncratic who favors little rates.

“Trump’s conscionable going to regenerate him with a dove. So we're gonna get a batch of monetary stimulus. We're going to get a batch of fiscal stimulus,” added Waddell.

Read more: How the Fed complaint determination affects your slope accounts, loans, recognition cards, and investments

Meanwhile, the Fed's upward revision of GDP to 2.3% for 2026 volition apt mean much revenue, higher nett margins, and net growth.

Those expectations are fueling bullish terms targets crossed Wall Street.

Veteran strategist Ed Yardeni besides sees the scale reaching 7,700, precocious raising the probability of his "Roaring 2020s" script to 60% citing, among different reasons, taxation benefits from the Big Beautiful Bill and the AI-driven tech boom.

Meanwhile, Oppenheimer acceptable a 2026 people for the S&P 500 astatine 8,100, besides viewing the displacement successful monetary and fiscal argumentation arsenic a large operator for earnings.

“It’s got to beryllium bully for corporates and bully to the consumers. It volition beryllium reflected successful stocks,” Oppenheimer's main marketplace strategist John Stoltzfus told Yahoo Finance past week.

UBS is likewise positive, with strategists mounting a December 2026 people of 7,700, citing "resilient economical growth, Fed complaint cuts, and a roar successful AI concern spending."

Goldman Sachs analysts forecast S&P 500 net maturation of much than 12% successful 2026, versus a Street statement of 14%.

The index’s largest 7 stocks, which see Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL, GOOG), Amazon (AMZN), Broadcom (AVGO), and Meta (META), presently relationship for astir a 4th of the index’s earnings.

But Goldman sees information widening.

"We expect macro tailwinds from accelerating economical maturation and a fading tariff resistance connected margins volition enactment an acceleration successful the net maturation complaint for the remaining 493 stocks," wrote Goldman's Ben Snider successful a enactment connected Thursday.