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Wall Street stays bullish on stocks SPY, VOO, IVV offer balanced exposure beyond Big Tech.
Metals boom may extend as supply tightens; ETFs like SLV, CPER, PLTM, PALL in focus.
AI, banks and clean energy shine; watch KBWB, FTXL, WCLD, TAN, PBW in 2026.
As the market heads into 2026, the S&P 500 is coming off a third straight year of returns well above its long-term annual average of roughly 10%. The index is up more than 14% over the past year and has gained 0.3% so far this year (as of Jan. 5, 2026). A solid performance was recorded last year, though notably below the gains of over 23% seen in each of the prior two years, as quoted on Yahoo Finance.
How Does 2026 Open Up to Investors?
Investors enter 2026 with notable concerns. While GDP growth has accelerated and inflation has eased, the U.S. economy is increasingly showing signs of a “K-shaped” recovery, as mentioned in a Yahoo Finance article. Higher-income households continue to drive spending and wealth gains, while labor market concerns remain.
Lingering worries include heavy spending in the AI space, rich equity valuations, mounting risks in private credit and corporate debt, and a host of geopolitical uncertainties. Most central banks will likely hold off on monetary policy easing in the near term. The Fed is unlikely to cut rates at the upcoming meeting and is expected to follow a data-driven approach thereafter.
Against this backdrop, below we make a few investment predictions related to the exchange-traded fund (ETF) arena for 2026.
Bet on S&P 500 – Bullish Wall Street Forecasts for 2026
Major Wall Street firms remain optimistic about the year ahead. JPMorgan Chase and HSBC have forecast the index to reach 7,500 by the end of 2026, while Morgan Stanley and Deutsche Bank project even stronger gains, with targets of 7,800 and 8,000, respectively, as quoted on Yahoo Finance.
Elevated multiples reflecting expectations for above-trend earnings growth, an AI-led capital spending boom, rising shareholder payouts, and easier fiscal policy are likely to drive stock market gains ahead, said JPMorgan’s chief equity strategist Dubravko Lakos-Bujas, as quoted on Yahoo Finance.
With AI overvaluation fears clouding investors’ sentiment, the S&P 500 offers a balanced way to stay invested. While Big Tech still accounts for roughly a quarter of the index, the remaining exposure covers multiple sectors.
2026: A Standout Year for Metals?
Commodities also enjoyed a standout year in 2025. Gold and silver surged to all-time highs as investors sought safety, while copper reached record levels amid supply-chain disruptions and tariff-related uncertainty. Industrial usage also played its role in driving silver, platinum, and palladium higher in 2025. We expect the metal boom to thrive in 2026 (read: Will 2026 Be a Year of Silver & Copper ETFs?).
Agreed, after a staggering 2025, investors should be cautious about further gains. But then, fundamentals are strong for industrial metals. ETFs like iShares Silver Trust (SLV - Free Report) , United States Copper ETF (CPER - Free Report) , GraniteShares Platinum Trust (PLTM - Free Report) and abrdn Physical Palladium Shares ETF (PALL - Free Report) are thus in focus.
2026: A Great Year for Banks?
After years of rate hikes and volatility, banks are entering a sweeter spot. Falling benchmark rates, a potential yield-curve steepening, strong deal activity, cheaper valuations and blockbuster earnings are setting the stage for bank stocks to shine in 2026, with ETFs like Invesco KBW Bank ETF (KBWB - Free Report) already outpacing the broader market.
AI investments will likely remain strong in 2026 as the tech boom isn’t over yet. Bank of America analyst Vivek Arya projects a 30% year-over-year jump in global semiconductor sales, pushing the industry past the historic $1 trillion annual revenue mark in 2026, as quoted on Yahoo Finance. First Trust Nasdaq Semiconductor ETF (FTXL - Free Report) , and WisdomTree Cloud Computing FundWCLD can reap benefits out of this boom.
Beyond AI, Robotaxi to Be the Winning Theme in 2026?
Lucid (LCID), Nuro and Uber (UBER) debuted their ultra-luxury robotaxi and Uber-designed in-cabin experience at CES 2026. Autonomous-road testing began in December, led by Nuro, paving the way for a Bay Area launch later in 2026, as quoted on Yahoo Finance.
Alphabet's (GOOG, GOOGL) Waymo is seeking new funding at a valuation of at least $100 billion. Other players, including Amazon-backed Zoox, have also rolled out early rider programs ahead of broader launches in the emerging robotaxi market.
NVIDIA is also partnering with robotaxi operators, aiming to have its AI chips and Drive AV software power autonomous vehicle fleets as early as 2027, as quoted on CNBC.
AI-Led Power Boom: Tap Solar & Alternative Energy ETFs
Solar is regaining its shine as the AI-driven power boom lifts demand for cheap, reliable energy. Costs for photovoltaic panels have fallen sharply over the last decade, while battery storage prices are also falling (per the International Renewable Energy Agency), making solar energy a cheaper option.
Apart from falling panel and battery costs, easing policy fears (as mentioned on Investopedia) and attractive valuations have sparked a sharp rebound, with solar and clean-energy ETFs like TAN and PBW delivering outsized gains in recent months. Invesco Solar ETF (TAN - Free Report) and Invesco WilderHill Clean Energy ETF (PBW - Free Report) have gained 1.9% and 6.4% so far this year (as of Jan. 5, 2026).
International Economies to Stay Steady
International markets quietly outshone Wall Street in 2025 as tech concentration risks and lofty U.S. valuations weighed on domestic indexes. Cheaper valuations, broader sector diversification, and aggressive stimulus across Europe and Asia powered strong gains in ETFs like AIA, EZU and VEA, highlighting why global equities delivered a clear edge over U.S. markets. We do not expect the trend to reverse in 2026 (read: Top-Performing International ETFs of 2025).
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ETF Stories to Rule in 2026
Key Takeaways
As the market heads into 2026, the S&P 500 is coming off a third straight year of returns well above its long-term annual average of roughly 10%. The index is up more than 14% over the past year and has gained 0.3% so far this year (as of Jan. 5, 2026). A solid performance was recorded last year, though notably below the gains of over 23% seen in each of the prior two years, as quoted on Yahoo Finance.
How Does 2026 Open Up to Investors?
Investors enter 2026 with notable concerns. While GDP growth has accelerated and inflation has eased, the U.S. economy is increasingly showing signs of a “K-shaped” recovery, as mentioned in a Yahoo Finance article. Higher-income households continue to drive spending and wealth gains, while labor market concerns remain.
Lingering worries include heavy spending in the AI space, rich equity valuations, mounting risks in private credit and corporate debt, and a host of geopolitical uncertainties. Most central banks will likely hold off on monetary policy easing in the near term. The Fed is unlikely to cut rates at the upcoming meeting and is expected to follow a data-driven approach thereafter.
Against this backdrop, below we make a few investment predictions related to the exchange-traded fund (ETF) arena for 2026.
Bet on S&P 500 – Bullish Wall Street Forecasts for 2026
Major Wall Street firms remain optimistic about the year ahead. JPMorgan Chase and HSBC have forecast the index to reach 7,500 by the end of 2026, while Morgan Stanley and Deutsche Bank project even stronger gains, with targets of 7,800 and 8,000, respectively, as quoted on Yahoo Finance.
Elevated multiples reflecting expectations for above-trend earnings growth, an AI-led capital spending boom, rising shareholder payouts, and easier fiscal policy are likely to drive stock market gains ahead, said JPMorgan’s chief equity strategist Dubravko Lakos-Bujas, as quoted on Yahoo Finance.
Such optimism puts focus on S&P 500-based ETFs, including Vanguard S&P 500 ETF (VOO - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) and SPDR S&P 500 ETF Trust (SPY - Free Report) (read: S&P 500 to Hit At Least 7,500-Mark in 2026? ETFs in Focus).
With AI overvaluation fears clouding investors’ sentiment, the S&P 500 offers a balanced way to stay invested. While Big Tech still accounts for roughly a quarter of the index, the remaining exposure covers multiple sectors.
2026: A Standout Year for Metals?
Commodities also enjoyed a standout year in 2025. Gold and silver surged to all-time highs as investors sought safety, while copper reached record levels amid supply-chain disruptions and tariff-related uncertainty. Industrial usage also played its role in driving silver, platinum, and palladium higher in 2025. We expect the metal boom to thrive in 2026 (read: Will 2026 Be a Year of Silver & Copper ETFs?).
Agreed, after a staggering 2025, investors should be cautious about further gains. But then, fundamentals are strong for industrial metals. ETFs like iShares Silver Trust (SLV - Free Report) , United States Copper ETF (CPER - Free Report) , GraniteShares Platinum Trust (PLTM - Free Report) and abrdn Physical Palladium Shares ETF (PALL - Free Report) are thus in focus.
2026: A Great Year for Banks?
After years of rate hikes and volatility, banks are entering a sweeter spot. Falling benchmark rates, a potential yield-curve steepening, strong deal activity, cheaper valuations and blockbuster earnings are setting the stage for bank stocks to shine in 2026, with ETFs like Invesco KBW Bank ETF (KBWB - Free Report) already outpacing the broader market.
KBWB (up 3.9% so far this year (as of Jan. 5, 2026)) beat the S&P 500 (up about 0.3%) by a wide margin (read: Will 2026 be a Great Year for Banks? ETFs in Focus).
Tech Remains Healthy Despite Rich Valuations
AI investments will likely remain strong in 2026 as the tech boom isn’t over yet. Bank of America analyst Vivek Arya projects a 30% year-over-year jump in global semiconductor sales, pushing the industry past the historic $1 trillion annual revenue mark in 2026, as quoted on Yahoo Finance. First Trust Nasdaq Semiconductor ETF (FTXL - Free Report) , and WisdomTree Cloud Computing Fund WCLD can reap benefits out of this boom.
Beyond AI, Robotaxi to Be the Winning Theme in 2026?
Lucid (LCID), Nuro and Uber (UBER) debuted their ultra-luxury robotaxi and Uber-designed in-cabin experience at CES 2026. Autonomous-road testing began in December, led by Nuro, paving the way for a Bay Area launch later in 2026, as quoted on Yahoo Finance.
Alphabet's (GOOG, GOOGL) Waymo is seeking new funding at a valuation of at least $100 billion. Other players, including Amazon-backed Zoox, have also rolled out early rider programs ahead of broader launches in the emerging robotaxi market.
NVIDIA is also partnering with robotaxi operators, aiming to have its AI chips and Drive AV software power autonomous vehicle fleets as early as 2027, as quoted on CNBC.
AI-Led Power Boom: Tap Solar & Alternative Energy ETFs
Solar is regaining its shine as the AI-driven power boom lifts demand for cheap, reliable energy. Costs for photovoltaic panels have fallen sharply over the last decade, while battery storage prices are also falling (per the International Renewable Energy Agency), making solar energy a cheaper option.
Apart from falling panel and battery costs, easing policy fears (as mentioned on Investopedia) and attractive valuations have sparked a sharp rebound, with solar and clean-energy ETFs like TAN and PBW delivering outsized gains in recent months. Invesco Solar ETF (TAN - Free Report) and Invesco WilderHill Clean Energy ETF (PBW - Free Report) have gained 1.9% and 6.4% so far this year (as of Jan. 5, 2026).
International Economies to Stay Steady
International markets quietly outshone Wall Street in 2025 as tech concentration risks and lofty U.S. valuations weighed on domestic indexes. Cheaper valuations, broader sector diversification, and aggressive stimulus across Europe and Asia powered strong gains in ETFs like AIA, EZU and VEA, highlighting why global equities delivered a clear edge over U.S. markets. We do not expect the trend to reverse in 2026 (read: Top-Performing International ETFs of 2025).