Despite ongoing geopolitical tensions, persistent inflation, and a volatile policy environment, bearish sentiment has largely evaporated from U.S. equity markets in 2026. Financial advisors and wealth managers attribute this shift to AI-driven momentum, fear of missing out, and a historic concentration of equity ownership among the wealthiest Americans. Some warn that the absence of skeptics could make the next correction sharper than anticipated.
Pete Alliegro, chief investment officer at Sagient, notes that long-term secular trends have historically favored bulls, but the AI revolution has intensified this bias. “With the wealthiest 10% of Americans now owning over 90% of equities and the bottom 50% owning about 1%, there is some truth to that,” Alliegro said. He argues that the market has become partially insulated from standard consumer recessions due to this wealth concentration, though it remains vulnerable to systemic liquidity shocks like the COVID-19 crisis in 2020 and the financial system failures of 2008.
Alliegro points to the bond market as a counterweight worth monitoring. “The bond market has always been more skeptical, more focused on risk, and less willing to assume a rosy future than the stock market,” he said. “It’s always important to pay attention to the bond market to help keep everything in perspective.”
Ian Curtiss, chief wealth strategist at Coldstream Wealth Management in the Pacific Northwest, highlights structural barriers to short selling that have made bearish conviction increasingly rare and costly. “For short sellers, it’s not enough to simply identify mispricing in the market,” Curtiss said. “You have to correctly time your trades, have deep enough pockets to remain patient in the face of irrational behavior, or some combination of the two.”
Curtiss cites data from Moody’s Analytics showing that the top 10% of earners now account for nearly half of all consumer spending—a historic high. This dynamic has insulated corporate earnings from broader economic weakness, but Curtiss views it as procyclical rather than structural. He also flags valuation risk: consensus earnings growth expectations of 14% to 16% for 2026 leave little room for disappointment, and with the top 10 stocks representing roughly 40% of S&P 500 value, a stumble among mega-cap names would reverberate disproportionately across the index.
“The same concentration of wealth that has sustained earnings growth makes the system more brittle than it appears,” Curtiss said. “A meaningful equity correction wouldn’t produce a gradual spending pullback. It would be swift, and the rest of the economy would feel it quickly.” He adds that the SpaceX IPO’s dramatic post-listing trajectory reflects sentiment more than fundamentals, raising a structural concern: without short sellers acting as a counterbalance, any future selloff may lack the stabilizing force of shorts covering their positions.
Mark Rawlings, founder and managing partner at Preservation Capital Private Wealth Management, affiliated with Prospera Financial Services, sees AI as the defining narrative driving market behavior in 2026. “We are seeing consistent, almost daily, investment opportunities stemming from the AI thesis,” Rawlings said. “Despite the perceived uncertainties in the economy, equity markets continue to rise to new all-time highs.”
Rawlings acknowledges that the economy and markets have become temporarily delinked, but he draws on historical precedent to frame his outlook. Markets revert to the mean over time, he argues, leading him to conclude that a correction is inevitable—it is a matter of when, not if. The SpaceX IPO, in his reading, is a symptom of broader AI exuberance, a major contributor to the technology-fueled optimism currently inflating valuations across the market. “The bears have not been rendered extinct; they are just hibernating,” Rawlings said.
For financial advisors navigating this environment, the consensus points to a familiar discipline: watch the bond market, stress-test portfolios for concentration risk, and resist the pull of FOMO-driven allocation. As wealth managers maintain cautious optimism on equities for the 2026 second half, the structural imbalances underpinning today’s rally deserve scrutiny from advisors building long-term client portfolios.
