The world’s most prominent investment bank says the massive rally in the stock market, which is moving into its fourth year, is not over. It is not close to over. That’s because the consumer still has muscle. Their appetite for spending will continue. Affordability will not be a wall that cannot be hurdled.
Bloomberg tells as much in a recent headline: “Goldman Sees US Consumer Powering Wider Equity Rally in 2026.” It’s on the Bloomberg front page in large black letters.
“A group at Goldman Sachs Group Inc., led by Ben Snider, has landed on companies that benefit when middle class consumers ramp up spending,” the news service reports. Yet, not every stock surges. Last year, companies with some attachment to artificial intelligence drove the market. This year, it will be healthcare providers, “essential” consumer products, and several slightly smaller sectors. Upscale consumer goods and segments like casinos will lead the rally this time. It will be a rally nevertheless.
“Stocks exposed to middle income consumer spending are particularly attractive.” This runs against today’s conventional wisdom. And it means “affordability” is not such a big issue. That’s because, Goldman Sachs says, consumer incomes will rise and more than offset consumer expenses. This, in turn, will trigger a 2.1% gross domestic product increase this year.
There is one caution for stock investors. Tech stocks may have become expensive.
What is almost impossible to believe is that this rally could continue. By almost any measure, the rally is unprecedented in recent history. In 2025, it rose 17%, to make the run even more impossible.
The correction may come, but it will not be a big one in 2026. If there is a correction, it will be over in 2026, and the market will exit the year higher.
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