Recently, several leading Wall Street institutions have released their market outlooks for 2026, with a surprisingly consistent tone—bullish. However, interestingly, the driving force behind this round of gains might be changing.

Let's first look at the specific expectations from major institutions. UBS sets a year-end target for the S&P 500 at 7,700 points, citing an expected EPS growth of about 10%, along with the possibility of the Federal Reserve further easing monetary policy; JPMorgan's baseline target is 7,500 points, but they say if the Fed really cuts interest rates significantly, the index could even break through 8,000 points, using an interesting term called "selective bull market"; Morgan Stanley is more aggressive, with a target of 7,800 points, and is optimistic about sectors like consumer discretionary, healthcare, financials, and industrials; Citibank predicts 2026 will be a "sustained but volatile bull market," with a baseline target of 7,700 points, and in an optimistic scenario, it could reach 8,300 points.

Why are so many institutions increasing their positions? The logic isn't complicated. First, corporate profits have momentum. All predict EPS will grow between 10% and 14%, which is the real support for the stock market's rise. Second, the AI wave has not yet reached its peak. The key change is that the beneficiaries of growth are no longer just tech giants but are beginning to spread into industries using AI, broadening market participation. Third, the macro environment is relatively friendly— the Federal Reserve is likely to maintain its rate-cutting pace, government stimulus policies are taking effect, and consumer spending is supported.

In short, what the U.S. stock market needs by 2026 is a scenario where profit growth is stable, policies are not tight, and profit opportunities are spreading from tech giants to various industries. Of course, market volatility will still exist, but the overall direction seems to be upward.