So, we’re a few weeks into 2026, and the stock market isn’t exactly doing what the doomers predicted. Everyone expected a massive "AI hangover" once the calendar flipped. Instead, the S&P 500 is sitting on a modest gain, roughly 1.19% to 1.44% depending on which hour you check the ticker.
It’s been a weirdly steady climb.
The index closed out 2025 at 6,845.50, and by mid-January, we've already seen it flirt with the 7,000 mark. It actually hit a record high of 6,977.27 on January 12th before catching its breath. Honestly, after three years of double-digit gains, most traders were expecting a face-plant. But the s and p performance year to date shows a market that is stubborn. It refuses to roll over, mostly because the "Magnificent Seven" aren't the only ones doing the heavy lifting anymore.
The Big Shift Nobody Noticed
For the last two years, you couldn't throw a rock without hitting a headline about Nvidia. Now? The narrative is shifting toward "The Great Re-leveraging."
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Goldman Sachs analysts, specifically Ben Snider, have been shouting into the void about how the market is broadening. They aren’t wrong. While the tech giants are still spending $500 billion on AI data centers, the rest of the S&P 500—the other 493 stocks—are starting to show real pulse.
Look at the S&P 500 Equal Weight Index. Early January data showed it actually outperforming the standard market-cap-weighted index. That is huge. It means the average company is finally benefiting from the "One Big Beautiful Act" (OBBBA) tax breaks and a Federal Reserve that seems surprisingly chill about cutting rates into a solid economy.
Why s and p performance year to date Matters Right Now
If you’re looking at your 401(k) and wondering if this is a fluke, you have to look at the earnings. FactSet is projecting a 15% earnings growth for the S&P 500 this year. That’s significantly higher than the 10-year average of about 8.6%.
It's not just "vibes."
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Real money is flowing into cyclical sectors. We’re talking about:
- Non-residential construction (thanks to all those new factories).
- Financials (deregulation is the new favorite word on Wall Street).
- Middle-income consumer stocks (people are still spending, even if they're complaining about the price of eggs).
The S&P 500 performance year to date isn't just a number; it’s a reflection of a "soft landing" that actually happened. We spent two years waiting for a recession that never showed up. Now, the market is pricing in a world where 3% inflation is just the new normal, and companies have learned to live with it.
The Elephant in the Room: Risks
Nothing goes up forever. You've probably heard the term "idiosyncratic risk."
Basically, the market is so concentrated that if one of the big boys—like Microsoft or Amazon—trips on a banana peel, the whole index takes a hit. We saw a bit of that on January 16th when the index dipped slightly as Treasury yields spiked to a four-month high.
Higher yields are the natural enemy of stock valuations. If the 10-year Treasury keeps creeping up, those 22x forward P/E ratios on stocks start to look a little bit like a fever dream. Morgan Stanley’s Lisa Shalett has been a voice of reason here, reminding everyone that a lot of the "good news" is already baked into the current price.
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What Actually Drives the Numbers
Tariffs are the wildcard. They're back in the conversation, and they have a weird double-edged effect. On one hand, they might boost domestic manufacturing, which helps those industrial stocks in the S&P. On the other, they’re basically a tax on consumers.
If the administration starts sending out "bonus checks" to offset those costs—as some Goldman analysts have speculated—it could keep the economy hot. But "hot" usually means "inflationary." It’s a tightrope.
You also have the "DOGE" effect. No, not the coin. The Department of Government Efficiency. The massive resignations and budget cuts seen in late 2025 created a weird blip in payroll numbers, but the market seems to have shrugged it off. It’s focused on the $100 billion in tax refunds expected to hit bank accounts in the first half of 2026.
Actionable Reality for Your Portfolio
So, what do you do with this?
First, stop waiting for a 20% crash to "get in." The s and p performance year to date suggests we are in a "grind higher" environment. It's not a vertical line like 2024, but it’s not a collapse either.
- Check your weightings. If you are still 90% in tech, you’re missing the move in financials and industrials.
- Watch the 50-day moving average. The index has stayed above this line since mid-December. If it breaks below, that’s your signal that the "broadening" trade is taking a break.
- Focus on Free Cash Flow. Companies that can fund their own growth without borrowing at these still-high rates are the ones winning right now.
The consensus year-end target for the S&P 500 is around 7,500. We are well on our way, but it won't be a straight shot. Expect the usual mid-year drawdown of 5% to 10%. It's healthy. It keeps the "animal spirits" from getting too out of control.
Keep an eye on the January 30th earnings calls. That’s when the "hyperscalers" have to prove those billions in AI spending are actually turning into revenue. If they miss, the year-to-date gains could evaporate in a week. If they beat? We might be looking at 7,000 sooner than anyone thought.