Sensationalist news outlets love to jump on any opportunity to sow fear about a potential stock market crash. But far from the doom and gloom crowd, real market experts expect a rather more rational, boring outcome.
Let’s see what the most prominent voices have to say.
Subdued enthusiasm
While industry insiders are generally cautious, few expect a crash. Morgan Stanley notes “continued equity gains in 2026” with modest growth, as a lot of good news is already priced in. Fidelity’s 2026 outlook is that it “could be another positive year” for the market — but investors shouldn’t ignore risks.
Oppenheimer expects a bullish year with a “broadening of the powerful rally” that began after 2022, supported by resilient earnings and moderating inflation. Goldman Sachs’ strategy group puts US recession odds at 25% and calls for continued expansion, with a base‑case 7% stock market return and 10% earnings growth in 2026.
Meanwhile, Bloomberg’s survey of Wall Street predictions has a base case of around 2.1% US real GDP growth and a supportive environment for risk assets.
The bearish crowd
However, some analysts are less optimistic. Wall Street veteran Marc Chaikin warns of a “65% chance of a bear market in 2026” with average losses of 20%, explicitly positioning himself as the contrarian who sees a downturn “nobody else” is calling.
Meanwhile, David Rosenberg points out that in major surveys “not a single economist” is currently forecasting a recession in 2026, which he flags as a contrarian warning sign.
So what’s the play?
While crash fears may be overinflated, there are genuine risks to consider. Schwab has neatly condensed these as four potential pitfalls: AI bubble risk, sticky inflation, credit stresses and Washington gridlock. While these are largely US-centric issues, they would undoubtedly have a knock-on effect for the UK market.
This leaves two options: those fearing a crash could liquidate everything and wait until things improve but, if wrong, might end up buying back in at a higher price. My preferred strategy in uncertain times is weighting my portfolio towards recession-resistant stocks, such as healthcare, utilities or consumer staples.
These sectors tend to enjoy consistent demand, even during economic downturns. If nothing happens, I still benefit from mild growth — and if the market does crash, my losses are minimal.
One stock to consider
One good example worth further research is pharma giant GSK (LSE: GSK), recently recommended as a safe pick in 2026 by analysts at AJ Bell. It has a 3.5% yield backed by a solid dividend policy, clear roadmap and proven track record of resilience.
In its latest Q3 results, two of its core divisions enjoyed growth of 15%-16%, while vaccines remained steady with £2.7bn in sales. The best part is its highly-diversified pipeline of new drugs, many of which are in late-stage clinical trials. This is critical because like most pharmaceutical companies, it faces real risk from patent expiries. This typically results in a huge loss of revenue as generics flood the market.
If all trials are successful and the new drugs go to market, GSK should enjoy sufficient cash flow to cover any losses. While nothing’s ever guaranteed, historical performance is encouraging, with total returns of around 63% in the past five years.
