Freedom Capital Markets Chief Market Strategist Jay Woods predicted the S&P 500 would end 2026 at around 7,200 in estimates made back in late 2025. Here’s what the market expert is saying now and why Micron Technology (NASDAQ:MU) has become the most important stock for investors to watch.
• Micron Technology stock is feeling bearish pressure. Why is MU stock dropping?
S&P 500 2026 Predictions
Similar to making changes to top stocks midway through the year, Woods is slightly tweaking his forecast for the S&P 500 for the rest of 2026.
“I give those end-of-year targets for fun and I don’t like to change them in the middle of the year,” Woods tells Benzinga in an exclusive interview.
With the S&P 500 trading near 7,500 at the time of the interview, Woods said it’s hard to know if the market index has peaked for 2026.
Based on seasonality, historical patterns and market rotation, Woods lays out his best guess of what happens for the second half of 2026.
“I can see a drawdown of 10% from our peak, which would give us a trip back below 7,000 in the coming three to four months and then we rally after this election is over. That’s how the cycle plays out.”
Woods predicts that the S&P 500, which is tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY) cold close the year out at the 7,650 or 7,700 level.
“I still think if we finish this year at 7,200, at 7,300, it’s a successful year.”
Micron the New Market ‘Tell’
One of the keys to where the S&P 500 trades in the second half is earnings reports before the end of the year.
“Do we reward companies for good earnings or do we keep them where they are?” Woods said. “I think Micron is now the new tell. It’s been Nvidia forever. It was Apple for years. There was Microsoft for years.”
Woods thinks Micron is now the best representative to the market based on its extreme growth and how investors react to earnings reports.
“Their earnings are growing hand over fist. You cannot put enough superlatives on what they’re doing, but price action’s starting to slow.”
Micron reported third-quarter financial earnings in late June, with fourth-quarter results expected to be reported in September.
The market expert cautions that when price action slows, there might be a correction. Woods cites past data from NVIDIA Corp (NASDAQ:NVDA) and similar patterns in his weekly newsletter.
Woods recalls Nvidia stock being on an unstoppable run until the third quarter of 2023, when price action did not respond to the company’s biggest blowout quarter ever.
“The momentum was lost. And when I look at momentum indicators in Micron, I see a divergence. It’s a bearish divergence.”
Micron is a great long-term stock according to Woods, who predicts the company could have a future market capitalization of $2.5 trillion or more.
Woods cautions that the stock is likely to consolidate from here and it could take some time to “take that next leg higher.”
“Micron will be the one to watch.”
Photo Courtesy: Piotr Swat on Shutterstock.com
