Investor caution is warranted for 2026, according to Mark Newton, technical strategist at Fundstrat Global Advisors, who expects the year to feature significant market volatility despite a positive year-end target for the S&P 500 index. Newton projects the benchmark index could reach 7,300 by year-end but anticipates a notable period of "consolidation" and instability, particularly during the spring months.
In a detailed discussion with financial media, Newton laid out his forecast for the coming months, starting with continued strength in equities but followed by choppy price action. He foresees the current rally sustaining for approximately six to eight more weeks before encountering increased pressure. Specifically, Newton predicts that from late February to early March, equity markets will begin experiencing selling pressure that may persist into May.
The catalyst for this expected turbulence centers on the technology sector, which Newton describes as nearing exhaustion after an impressive three-year performance. Prominent industry leaders such as Nvidia Corporation (NASDAQ: NVDA) and Microsoft Corporation (NASDAQ: MSFT) have exhibited signs of stalling, with many major technology stocks trading sideways for extended periods. Newton argues that such consolidation in key tech stocks is necessary before the broader market can advance further.
Despite these near-term challenges, Newton underscores the ongoing presence of a secular bull market fueled by the persistent growth of artificial intelligence technologies. He points to several immediate market indicators signaling health and strength, such as broadening market participation. Industrial, financial, and consumer discretionary sectors have demonstrated upward momentum, alongside the Dow Jones Transportation Average reaching recent highs above 18,000 points.
Newton further highlighted positive economic fundamentals supporting the equity markets. Labor market statistics show a declining rate of layoffs accompanied by an increasing quits rate, which together suggest a robust employment environment. This strengthening backdrop lends support to his outlook that the fundamental bullish trend will endure despite intermittent volatility.
On commodities, Newton issued ambitious targets, anticipating gold prices to climb to $5,000 per ounce and silver reaching $90 per ounce within the first half of the year. These projections are tied to expected interest rate movements, with rates anticipated to rise later in 2026. In contrast to precious metals, oil prices are expected to hit a bottom by mid-February. Newton views this trough as a buying opportunity for energy sector equities, implying potential sector-specific gains even amid broader market uncertainties.
With respect to the broader technology segment, Newton advises a selective investment stance. While generally cautious about the tech sector’s near-term prospects, he identifies Apple Inc. (NASDAQ: AAPL) and Tesla Inc. (NASDAQ: TSLA) as noteworthy exceptions. Both companies have underperformed recently but are seen as positioned for potential breakouts, making them attractive targets for investors seeking opportunities in tech amidst a consolidating market.
Year-to-date performance through early 2026 shows positive trends among major indices. The S&P 500 had increased approximately 0.62%, the Dow Jones Industrial Average rose about 1.85%, and the Nasdaq 100 gained roughly 0.51%. In premarket trading on a recent Thursday, ETFs representing these indexes, such as the SPDR S&P 500 ETF Trust (NYSE: SPY) and the Invesco QQQ Trust (NASDAQ: QQQ), edged lower—SPY down 0.20% at $688.19 and QQQ down 0.29% at $622.35.
Newton’s outlook balances optimism for the market’s long-term trajectory with a clear emphasis on anticipated short-term adjustments. He highlights the importance of monitoring sector rotation and economic signals as the year unfolds, advocating for disciplined investment approaches tailored to the expected periods of consolidation and volatility.