Bank of America expects a meager gain for stocks next year

Bank of America isn't forecasting another blockbuster year for the S & P 500 . Savita Subramanian, the bank's equity and quant strategist, said the benchmark index should rise to 7,100 in 2026. That implies upside of nearly 5% over where the broad average finished Tuesday's session. "Multiple expansion and earnings growth both pushed the S & P 500 up 15% this year," Subramanian wrote to clients in a Wednesday note to clients. "In 2026, earnings will do the lift." Subramanian said earnings should rise 14% next year. But the index's gains will be capped by a 10-point contraction in price-to-earnings multiples, she said. .SPX YTD mountain The S & P 500 in 2025 In a bear case, the S & P 500 could fall to 5,500, Subramanian said. That represents a decline of around 20% from current levels, whic