Stock markets may continue to rise into 2026

U.S. stocks produced three consecutive years of strong, double-digit gains through 2025, and Morningstar data show many stock and bond fund categories posted solid returns last year. The article notes geopolitical tensions, fiscal and monetary policy questions, and market momentum as key factors that could influence 2026 outcomes.

The U.S. stock market delivered large, repeated gains through 2025, prompting discussion about whether that run can continue into 2026. This performance has boosted household wealth for many investors, while geopolitical tensions and domestic policy choices have raised questions about future stability. The article highlights both momentum in markets and persistent risks, including foreign policy actions and fiscal pressures. It also notes strong interest in technologies such as artificial intelligence and ongoing debate about the Federal Reserve's role. What we know: - The article mentions that a broad S&P 500 index fund like Vanguard's S&P 500 ETF (VOO) gained 17.8 percent in 2025, after rises of 25 percent in 2024 and 26.3 percent in 2023, and that the fund rose about 86 percent over three years including dividends. - Morningstar figures reported in the article show domestic stock funds up about 13 percent over 12 months, international stock funds up about 31.4 percent over 12 months, and taxable bond funds up about 7.6 percent over 12 months. - Sector and specialty returns cited include precious metal stock funds rising about 152.8 percent over 12 months and Latin America stock funds up about 48.8 percent over 12 months; funds focused on digital assets fell roughly 24.5 percent over three months and 11.5 percent over 12 months. - The article mentions that Nvidia produced an exceptional five-year annualized return of about 70.3 percent, according to FactSet, while noting that narrow-sector funds showed extreme variation in performance. - The article reports potential risks that could affect markets in 2026, including geopolitical tensions in the Western Hemisphere and beyond, the effects of tariffs, a widening U.S. budget deficit, and questions about Federal Reserve independence and leadership. Summary: Strong returns through 2025 have raised household wealth and supported spending patterns, but the outlook for 2026 is mixed because momentum and profit expectations sit alongside geopolitical, fiscal and monetary risks. Wall Street forecasts are generally optimistic while the article emphasizes that outcomes depend on developments such as corporate profits, policy decisions and geopolitical events. Undetermined at this time.