A seasoned investment professional from an asset management firm recently shared his views on the stock market. He believes that by the end of the year, the S&P 500 will approach 7,700 points, but the path there may not be so smooth.

He straightforwardly stated that the stock market in 2026 will exhibit a zigzag pattern. Specifically, there is a high likelihood of a 7% to 15% correction in the first half of the year — and the reason is quite simple: Wall Street's current bullish sentiment is too intense. "The market needs an emotional reset, and we expect this to happen within the next 6 months."

That said, he remains quite optimistic about the long-term prospects of the stock market. He pointed out that the true driving forces behind the market come from three aspects: strong corporate profits, an active IPO market, and the continued hotness of AI. These factors combined are enough to support the market's confidence.

Based on this judgment, he outlined his investment approach — gradually reducing the overweight in the technology sector and increasing overall stock market exposure. In other words, shifting from a focus on single hotspots to a diversified allocation.