The US stock market is preparing to close the books on a remarkable third consecutive year of double-digit percentage gains, with the benchmark S&P 500 index rising over 17% in 2025. This performance continues an impressive bull market run that began in October 2022, driven by artificial intelligence optimism, Federal Reserve interest rate cuts, and sustained economic growth despite recession fears. However, market strategists suggest that achieving a fourth stellar year in 2026 may require multiple factors to align perfectly.

Market Performance and Recent Trends

The current bull market has delivered exceptional returns across multiple years, creating a strong foundation for investor confidence. As of December 24, 2025, the market showed mixed performance among individual stocks, with notable movements in both directions.

The S&P 500's performance trajectory shows consistent strength, with the index gaining 24% in 2023, 23% in 2024, and 17% in 2025.

Earnings Growth and Corporate Profit Outlook

Corporate earnings are expected to serve as a primary driver for continued market strength in 2026. According to LSEG research, S&P 500 companies are projected to achieve earnings growth of over 15% in 2026, building on a solid 13% increase in 2025. This growth is anticipated to be more broadly distributed across companies, moving beyond the concentration seen in recent years.

The "Magnificent Seven" technology giants, including NVIDIA, Apple, and Amazon, demonstrated exceptional profit growth of 37% in 2024, significantly outpacing the 7% growth rate for the remaining S&P 500 companies. However, this performance gap is expected to narrow considerably in 2026, with projections showing the Magnificent Seven achieving 23% earnings growth compared to 13% for the rest of the index.

Federal Reserve Policy and Economic Factors

Monetary policy remains a critical component for sustained market performance. Fed funds futures indicate investor expectations for at least two additional quarter-point interest rate reductions in 2026, following 175 basis points of cuts implemented during 2024 and 2025. Market participants are closely monitoring the economic balance between sufficient softening to support inflation control and rate cuts, while avoiding recession conditions.

The selection of a new Federal Reserve chair, expected early in 2026, represents a significant factor that investors are watching for signals about the central bank's future dovish stance and institutional independence.

Market Strategist Projections and Targets

Several market strategists have established optimistic targets for 2026 performance. Deutsche Bank has set an S&P 500 target of 8,000, representing approximately 16% upward potential from current levels. However, some analysts maintain more conservative outlooks, with CFRA's year-end 2026 price target of 7,400 suggesting roughly 7% gains from present valuations.

Historical Patterns and Risk Factors

Historical analysis provides mixed signals for 2026 market performance. Bull markets entering their fourth year have averaged gains of 12.80% since 1950, posting positive performance in six of seven instances. However, midterm election years typically show more subdued performance, with the S&P 500 averaging just 3.80% gains compared to 11% during other years of presidential terms.

Additional considerations include the ongoing relationship between the United States and China, potential breakthrough developments that could serve as positive catalysts, and the sustainability of artificial intelligence infrastructure spending that has supported recent market gains.

Market strategists emphasize that strong performance in 2026 will likely require continued AI investment, Federal Reserve rate cuts, and broad earnings growth extending beyond the tech giants. As the market completes its third consecutive year of double-digit gains, investors and analysts alike are cautiously optimistic about the potential for further growth in the coming year.

US stocks advanced as investors anticipated a quick resolution to the government shutdown, which could enable the release of key economic data and potentially strengthen expectations for Federal Reserve interest rate cuts. Market gains were supported by dip buyers maintaining the year-end rally despite ongoing technical volatility in trading.

Meanwhile, the New York Stock Exchange (NYSE) and Nasdaq are set to maintain regular trading hours on Veterans Day, November 11, despite its status as a federal holiday. This decision highlights the stock markets' commitment to providing continuous trading opportunities for investors.

Key Points

• Stock Markets: NYSE and Nasdaq will operate normally on Veterans Day
• Date: November 11
• Holiday: Veterans Day
• Bond Market: Will remain closed
• Current Market Trend: US stocks advancing on shutdown resolution expectations

Market Schedule

About Veterans Day

Veterans Day is a federal holiday in the United States that honors military veterans and commemorates the end of World War I. While many government offices and some businesses observe this holiday by closing, the major stock exchanges have chosen to remain open, ensuring that financial markets continue to function on this day.

This decision by the NYSE and Nasdaq to operate on Veterans Day underscores the importance of maintaining market continuity and providing investors with uninterrupted access to trading, even on federal holidays. It's a reminder of the global nature of financial markets and the need for consistent operation in today's interconnected economy.

Investors should note that while stock markets will be open, the bond market will be closed on Veterans Day. This divergence in market operations could potentially impact trading strategies and liquidity in certain securities, particularly those closely tied to bond market performance.

Current Market Sentiment

The recent advance in US stocks reflects investor optimism regarding a potential quick resolution to the government shutdown. This anticipated resolution is expected to facilitate the release of important economic data, which could in turn influence expectations for Federal Reserve interest rate decisions. The market's upward movement is being sustained by dip buyers who are helping to maintain the year-end rally, despite the presence of ongoing technical volatility in trading.

As always, market participants are advised to plan their trading activities accordingly, taking into account these holiday schedules, current market trends, and potential impacts on market dynamics.