Wall Street Strategist Reveals the Sectors Poised to Lead the Stock Market in a ’Boring, Normal Year’ in 2026

Forget the crypto rollercoaster. A top Wall Street strategist is betting on a different kind of 2026—one defined by boring, predictable growth in traditional sectors. It's a forecast that feels almost quaint in a world of 24/7 digital asset trading.

The 'Steady Eddie' Playbook

The call hinges on a return to normalcy—a concept as foreign to crypto natives as a 9-to-5 trading window. The strategist is bypassing the hype cycles and volatility that define our space, pointing instead to established industries with deep moats and reliable cash flows. Think infrastructure, healthcare, and industrials.

Why This Matters for Digital Assets

This isn't just a stock pick. It's a macroeconomic weather vane. A 'boring, normal year' in traditional finance implies subdued inflation, measured Fed policy, and risk appetite flowing toward stability. That environment can cut both ways for crypto: it drains the speculative frenzy but also builds the foundational trust that institutions crave before making bigger moves.

The strategy leans on hard numbers from the original analysis, not vibes. It's a reminder that while we're building the future of finance, the old world still moves trillions based on earnings reports and guidance—not community memes.

The Final Tally

So, take the note. A pivot to 'boring' in 2026 could signal a broader market maturation where digital assets are judged not just on promises, but on utility and revenue. Or, it could just be another Wall Street narrative designed to justify those hefty management fees. Either way, it's a sector call you can't ignore.

Key Takeaways

• Big tech stocks are likely to "take a little bit of a pause" next year, tempering the S&P 500's full-year returns, according to Jay Woods, chief strategist at Freedom Capital Markets.
• Woods expects more staid sectors like industrials, transports and financials to assume market leadership next year.
• Midterm elections, new Federal Reserve leadership, and the Supreme Court's ruling on tariffs could amplify market volatility.

After three consecutive years of double-digit gains, the S&P 500 is headed for “a boring, normal year,” according to one Wall Street strategist. 

“We think the bull run continues, but it’s not going to be the stampede” of the last three years, Jay Woods, chief strategist at Freedom Capital Markets, told CNBC on Tuesday. 

Woods expects the S&P 500 to rise between 3% and 5% over the next year to finish 2026 in the 7,200s. That’s one of the more bearish forecasts on Wall Street, where the median year-end S&P 500 target is about 7,650, according to CNBC’s most recent strategist survey.

Why This Is Important

Mega-cap tech stocks have fueled the stock market's rise for the past three years. But as concerns about AI spending grow, more and more analysts are warning that the tech sector's relentless march higher could be in jeopardy next year.

Woods attributes some of the benchmark index’s expected tepid returns next year to changing market leadership, a transition that he observes is already under way. “We’ve seen a broadening of this market,” he said. “That broadening is going to continue.” 

Technology stocks, for the third straight year, fueled the market’s gains in 2025 as the AI boom accelerated. Big Tech is expected to spend about $400 billion on infrastructure—much of it dedicated to AI—this year, up from about $250 billion last year. That spending fueled sales growth and stock gains for AI’s “pick and shovel” makers, a group that spans the technology, communications, industrials and utilities sectors. 

But lately, AI investments have become a liability for the so-called hyperscalers—Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), Meta (META) and Oracle (ORCL)—who investors worry may struggle to see adequate return on their massive investments. Woods expects those concerns to continue to pressure shares of tech giants, whose market capitalizations in the trillions make them the most important stocks in the capitalization-weighted S&P 500. 

“There are going to be winners and losers in technology,” Woods said. “It’s not ‘AI is lifting all stocks,’ and as a result, some of those mega caps may take a little bit of a pause.” Instead, Woods sees more ho-hum sectors—such as industrials, transportation and financials—leading the market next year as investors reward their “slow, steady growth.”

Related Education

While Woods predicts a “boring, normal year” in terms of what stocks lead, the road to next December will be far from boring, he says. Midterm elections in November are expected to increase volatility, as could a sharp pivot from the Federal Reserve, which will have a new leader in May. 

Investors could also be thrown a curve ball early in the year when the Supreme Court rules on President Donald Trump’s signature “Liberation Day” tariffs. “If they deem tariffs illegal … it’s gonna cause uncertainty,” which is what weighed on markets for much of the first half of 2025, according to Woods.