S&P 500 Set For 'Choppy' 2026 As Fundstrat's Mark Newton Sets Target At 7,300— Warns Stocks Could See Drawdown In February

Investors should prepare for significant volatility in 2026, according to Fundstrat Global Advisors' Mark Newton. While maintaining a bullish year-end S&P 500 target of 7,300, Newton warns that the path there will include a “consolidation,” potentially triggering a market drawdown starting this spring. The Coming Consolidation Speaking to Yahoo Finance, Newton outlined a roadmap for the year that begins with strength but quickly pivots to turbulence. He predicts the current rally will persist for another six to eight weeks before stocks hit a wall. “I do expect it’s going to be a year of consolidation and choppiness… I think it’s going to start likely in the latter part of February, early March where we start to see some pressure in stocks that likely lasts down to May,” he said. The primary catalyst for this volatility is exhaustion in the technology sector. Newton notes that after a “phenomenal three-year run,” bellwethers like Nvidia Corp. (NASDAQ:NVDA) and Microsoft Corp. (NASDAQ:MSFT) are showing evidence of stalling. He pointed out that many tech giants have traded sideways for months, arguing that a consolidation in these leaders is necessary before the market can move higher. Bullish Signals And Economic Strength Despite the forecast for a mid-year correction, Newton emphasizes that the secular bull market remains intact, driven by the long-term AI boom. He points to immediate signs of market health, specifically widening market breadth. Sectors such as industrials, financials, and discretionary stocks are climbing, while the Dow Jones Transportation Average recently hit new highs on Wednesday at 18,131.95 points. Newton also highlighted resilience in the broader economy, citing labor market data where layoff rates are dropping while the quits rate rises—classic indicators of a healthy employment environment. Commodities And Contrarian Plays Newton offered aggressive targets for commodities, projecting that gold could reach $5,000 and silver $90 in the first half of the year before interest rates rise. Conversely, he expects oil prices to bottom out by mid-February, presenting a strong buying opportunity for energy stocks. Within tech, Newton recommends a selective approach. While wary of the broader sector, he identified Apple Inc. (NASDAQ:AAPL) and Tesla Inc. (NASDAQ:TSLA)—both of which have lagged recently—as attractive buys poised for a breakout. Benchmark Indices Remain Positive In 2026 So Far On a year-to-date basis, the benchmark indices have been trading positively so far in the new year. The S&P 500 index was up 0.62% YTD, the Dow Jones by 1.85%, and the Nasdaq 100 by 0.51%, respectively. The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, were lower in premarket on Thursday. The SPY was down 0.20% at $688.19, while the QQQ declined 0.29% to $622.35, according to Benzinga Pro data. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock