There are four pillars that ensure the bull market will continue next year, according to the Sevens Report. With this year mostly in the rearview mirror, investors are looking ahead to 2026. With just one trading day left, stocks look like they could end the year near all-time highs. As of Monday, the S & P 500 remained not even 1% away from its record, even though it had ended the session lower. It was last hovering around 6,900. There’s confidence on Wall Street the rally can continue. On average, strategists expect the S & P 500 can post another double-digit advance in 2026, potentially ending the year at 7,629, according to CNBC’s Market Strategist Survey. Tom Essaye, founder of the Sevens Report, agreed the advance can continue, albeit with more challenges. He urged investors to keep an eye on four key pillars of the rally: artificial intelligence, expected stable economic growth, monetary easing, and tariff stability. Pillar 1: AI enthusiasm The one theme responsible for the stock market’s outsized gains of the last three years is artificial intelligence. The release of ChatGPT in late 2022 drove a fervor that carried the S & P 500 up 24% in 2023, 23% in 2024, and, to date, more than 17% in 2025. It’s expected to continue to drive the market in 2026, if not to the same degree as it did these last three years, according to the Sevens Report. Companies will have to work harder to justify steep multiples by showing earnings growth. “While AI Enthusiasm is still a bullish force for markets in 2026, the rest of the economy and market will have to do some heavy lifting if we’re going to see the major indices repeat 2025’s stellar performance,” read the report. “Verdict: In place, but not as strong as years past.” Pillar 2: Stable economic growth The economic outlook remains steady heading into 2026, and could continue to bolster the overall market outside of the megacaps, but it’s the labor market that bears watching, read the report. While a 4.6% unemployment rate can be shrugged off by investors for now, any rise above 5% will likely to start to hurt equities, the note read. “That will be a very clear economic warning sign,” read the report. “At that point, it leaves the market very vulnerable to any AI disappointment, because if AI disappointment is combined with growth worries, few (if any) sectors will be able to hold up.” Pillar 3: Ongoing rate cuts The interest rate outlook will need to be monitored heading into the new year. While the Federal Reserve lowered its forecast to just one quarter-point cut in 2026, investors remain hopeful that a new, more dovish, Fed chair will further ease interest rates. Markets were last pricing in expectations of two rate cuts in 2026, according to the CME FedWatch Tool . “Verdict: Still in place, but it all rides on a dovish new Fed chair actually cutting rates,” read the report. Pillar 4: Tariff clarity The stock market muscled past tariff concerns in 2025, but those fears will resurface early next year with the Supreme Court’s decision on the legality of the Trump administration’s levies. The decision could have huge repercussions, including potential tariff refunds or the reinstatement of tariffs through other avenues. What’s more, if it causes bond yields to spike, pushing the 10-year Treasury yield above 4.50%, that will hurt the stock market. “Verdict: Still in place, but risk of damage early in 2026,” read the report.
