What is the investment outlook for the remainder of 2026? Every quarter, I sit down with Reuters to provide my assessment of the markets for their ongoing poll. The questions are straightforward, asking for specific forecasts for the Dow and the S&P 500 at Mid-Year 2026, Year-End 2026, and looking ahead to Mid-Year 2027.
Our Philosophy at Granite Wealth
Predicting market movement is no simple task, but we ground our decisions in a clear philosophy. We are growth stock managers because we believe stocks are fundamentally worth their current and future earnings. To estimate future pricing, we look closely at a stock’s price history and the immutable laws of supply and demand.
While many use simple price-earnings ratios, we employ a multi-layered methodology:
- Earnings Monitoring: We track the earnings and “beat rates” of all companies in our portfolios and across all market sectors.
- Analyst Revisions: We pay close attention to when analysts raise or lower ratings, as these revisions are key movers of stock prices.
- Technical Analysis: We review charts before and after earnings releases to identify support and resistance levels.
Current Risks and “Black Swans”
What keeps me up at night? Currently, it is interest rates and the Fed. I believe there is a high probability that we will see the bond market and interest-rate-sensitive stocks get “played” again later this year.
Furthermore, we are watching the “unknowable” effects of AI on the workforce and company profit margins, alongside the potential for a “Roaring 2020s” bull market driven by disruptive tech. Layer in the volatility of a Midterm election year and the influence of algorithmic trading, and there is plenty to monitor. When asked what could upend my forecasts, my answer is almost always investor panic regarding market volatility.
Decoding 2026 Volatility
Interestingly, while investors may feel significant pain, 2026 has actually been quite tame. Data from our partners at NASDAQ Dorsey Wright shows that we have seen fewer “extreme” days (gains or losses of at least 1%) than the historical average.
- 2026 So Far: Only six days have seen a 1% move; unfortunately, four of those were to the downside.
- Historical Context: In 2025, about 22% of trading days were “extreme.” This is below the historical annual average of 26%.
The market action has seemed worse than reality because the “extreme” days we have experienced have been weighted toward the downside, making us feel double the pain even in a quieter year.
The Reuters Forecast
Based on our data and current trends, here are my entries for the latest Reuters poll:
| Index | Mid-Year 2026 | Year-End 2026 | Mid-Year 2027 |
| Dow | 53,700 | 51,500 | 55,000 |
| S&P 500 | 7,650 | 7,450 | 8,250 |
Regarding the next three months, I believe a correction in the S&P 500 is likely. However, my view on AI driving performance remains about the same as it was last quarter — we remain optimistic, yet disciplined.
How would you respond to these market questions?
