Wall Street's favourite gauge for U.S. equities could climb into the 7600-7800 territory by Dec. 31, 2026 - at least according to traders on Kalshi.

Kalshi's prediction market contract tied to the S&P 500's (SPY  ) year-end 2026 closing level currently reflects expectations that the index will finish between 7,600 and 7,799.99. About 19% of traders are wagering that the benchmark index will close between those levels. That range sits comfortably above recent S&P 500 levels and implies a continued upward trajectory for the benchmark that tracks the largest U.S. stocks.

The S&P 500 finished 2025 up roughly 16-18%, delivering strong gains despite a volatile year marked by President Donald Trump's tariff threats, geopolitical uncertainty, the longest U.S. government shutdown and shifting rate expectations, with an AI-driven rally in megacap technology stocks helping offset repeated macro shocks.

The index is still hovering near fresh record highs in the high-6,900s, continuing its momentum into 2026.

What's On The Cards For 2026?

Wall Street strategists broadly anticipate further gains in 2026. Major forecasts-including from Goldman Sachs and other houses-point to double-digit earnings growth and mid-single to high-teens percentage upside for the S&P 500 this year.

Analysts' average year-end targets cluster in the 7,500-8,100 range, according to a report by The Motley Fool, aligning well with Kalshi's implied probabilities.

Earnings growth expectations remain robust, supported by strong corporate profitability, a rebound in dealmaking and continued AI investment.

However, risks, including high valuations and potential midterm elections volatility, could complicate the path.

Unlike traditional analyst forecasts, the Kalshi market prices outcomes based on real money bets. Participants buy contracts on whether specific events will occur. Thus, they remain sensitive to shifting macroeconomic winds.

Price Action: S&P 500 futures rose 0.40% on Wednesday ahead of the Federal Reserve's interest rate decision and earnings reports from major tech companies.