State Street Strategist Sees S&P 500 Hitting 8,000 by 2026

Michael Arone cites surging productivity, tax refunds, and a 'mid-90s' tech cycle as drivers for the bullish forecast.

Published on Feb. 10, 2026

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State Street's chief investment strategist, Michael Arone, believes the S&P 500 could surge to 8,000 by the end of 2026, a bold call that reflects his conviction that the current market has far more in common with the roaring mid-1990s than a late-cycle bubble. Arone cites surging non-farm productivity, $150 billion in looming tax refunds, and a 'mid-90s' tech cycle as key drivers for his optimistic forecast, which exceeds the Wall Street consensus of a 7-10% gain.

Why it matters

Arone's forecast challenges the prevailing market sentiment and suggests the current bull run still has significant room to run, driven by fundamental factors like productivity gains and fiscal stimulus. His views provide insight into how top strategists are interpreting the economic landscape and positioning their investment recommendations.

The details

Arone is so confident in the underlying fundamentals that he is ready to retire his signature slogan of being 'uncomfortably bullish.' He believes the 'holy grail' of non-inflationary productivity growth, coupled with strong corporate earnings and accelerating business investment, will propel the market higher. However, he also acknowledges the 'SaaSpocalypse' - the massive correction in software stocks as investors separate AI winners from losers. To navigate this shift, Arone recommends a rotation into financials, small caps, and real assets.

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  • In January 2026, gold and silver prices surged 29.5% and 70% respectively, before a correction.

The players

Michael Arone

The chief investment strategist at State Street, which manages $5.5 trillion in assets.

State Street

A $5.5 trillion asset management firm where Michael Arone serves as the chief investment strategist.

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What they’re saying

“I like to have a little fun with it, but it's rare that the S&P finishes in the single digits. Given the surge in productivity and the massive fiscal stimulus coming, why not give an optimistic forecast? The data suggests this bull market still has legs.”

— Michael Arone, Chief Investment Strategist (Forbes)

“It's almost too good. I think it captures a lot of how investors are feeling—some people smirk, but it embodies that sense that while things feel stretched, the ingredients for a rally are still there.”

— Michael Arone, Chief Investment Strategist (Forbes)

“This is capitalism at its finest. The rising tide that lifted all AI boats is over.”

— Michael Arone, Chief Investment Strategist (Forbes)

What’s next

Investors will be closely watching to see if the S&P 500 can reach the 8,000 level by the end of 2026 as Arone predicts.

The takeaway

Arone's bullish forecast challenges the conventional wisdom and suggests the current market cycle may have more room to run, driven by factors like productivity gains and fiscal stimulus. However, his views also highlight the shifting dynamics in the tech sector as the 'SaaSpocalypse' separates AI winners from losers, requiring a more selective approach to investing.