Bull Market 2026: More Room to Run?

Last week we leveraged LPL Research to counter the idea that we are in an AI bubble, much like the dot-com bubble and subsequent burst experienced at the beginning of the 21st century. The comparison is rather weak.

S&P 500 All-Time Highs: Can a Fourth Year of Double-Digit Growth Happen?

This week, we will take it a step further. There’s reason to believe we are still on the path to more market growth in 2026. That may be difficult to accept, because the market has already produced three consecutive years of double-digit returns. A fourth would not be unprecedented, but it would be rare. The S&P 500 Index has hit 16 all-time highs in 2026.

Stock Valuations and Corporate Earnings: The Fundamental That Drives Markets

If you watch our videos long enough, you’ll hear us say that the market may not make much sense day to day, but eventually it returns to the fundamentals. And the key fundamental is corporate earnings. If companies are making money, their stock tends to go up.

Q1 Earnings Season 2026: 84% Beat Estimates With 26.8% Average Growth

And earnings are very good right now. Look at this Earnings Season Dashboard provided by LPL Research.

You can see as of May 8th, 447 companies in the S&P 500 had reported 1st quarter earnings. 84% of those companies beat their earnings estimates, and the average earnings growth is sitting at a staggering 26.8%.

So, when you hear the noise that we are out over our skies when it comes to stock valuations, these numbers counter that.

Forward P/E Ratio Drops 4%: Why Stocks Are Actually Getting Cheaper

LPL Portfolio strategist George Smith writes, “One of the most important dynamics in equity markets this year has been the relationship between price and earnings. While the S&P 500 price has moved higher, earnings expectations as measured by forward earnings per share have increased at a faster rate.”

In other words, stocks are actually cheaper. Here’s the chart backing it up.

At the time of the chart creation, the Index was up 8.3% year-to-date. But forward earnings per share grew 12.8%. That means the forward P/E ratio is down almost 4%. That ratio is used to determine stock valuation. The bigger the number the more over bought the market becomes. When it drops, there’s more justification that stocks could move higher.

Ignore the Doomsday Fear Mongers: Stick to Your Long-Term Investing Plan

Of course, nothing is guaranteed and there will continue to be volatility around global uncertainty, inflation, and the Artificial Intelligence buildout that produces winners and losers. But, the key takeaway here is the facts don’t lie. Investors should not listen to the doomsday fear mongers, and focus on a long term investing plan that believes in the American economy. Anyone who’s best against it over the long term, has lost.

Securities are offered through LPL Financial, Member FINRA/SIPC. GenWealth Financial Advisors is an other business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance, LLC, a registered investment adviser. Independent Advisor Alliance, LLC is a separate entity from LPL Financial.