Expect The Theme Of 2026 To Remain Volatility

Market Commentary – February 9, 2026

The equity market has started the year experiencing high volatility, as reflected in the Cboe Volatility Index (VIX), which has already reached 20 six times in just six weeks.

It feels like a whole year’s worth of events compressed into just a month and a half. We expect this heightened volatility to persist through a good portion of 2026 – which is seen as the norm for mid-term election years. Why? Because historically they have been the most turbulent phase of the presidential cycle, with average drawdowns (corrections) of 19%. But it’s important to note that the rallies that occurred off of the lows of those corrections were very strong – gaining an average of 31% one year later.

So far, the S&P 500 is following the historical pattern of a mid-term election year. Investors need to remain fearless and, to weather this volatility, portfolios need to be diversified. We maintain that a secular bull market remains intact, and our year-end forecast for the S&P 500 is 7500.

S&P 500 Range Bound For Now

The S&P 500 has been in a range from 6538 to just under 7000. The bias has been to the upside, but we believe there remains risk that this trading range breaks to the downside, keeping volatility elevated. Technology is currently in a major correction, with the sector already down 13% off the highs. Technology has been the best performing sector for the past few years, so it’s normal to have the sector give back some of its gains. We believe the risk is this sector remains in a correction and could have a bear market correction of 20%. Semiconductors are still trending up but also could continue to consolidate and or correct. We maintain that Technology and particularly semiconductors remain the leadership of this secular bull market as this is a pause that refreshes the sector.