Wall Street forecasters expect the stock market to grind higher in 2026 as earnings grow, the Fed cuts rates, and the US avoids a recession.

Asian shares were mixed on Thursday after the U.S. stock market again approached its record high following the Federal Reserve’s cut in its main interest rate. U.S. futures fell and oil prices were little changed.

The valuations of some artificial intelligence companies are approaching those of the dot-com boom. But investors worry that pulling money from today’s market risks future gains.

Wall Street's "fear gauge" was rising on Wednesday ahead of the Federal Reserve's final rate decision of the year. The Cboe Volatility Index, or "VIX," was up 2.6% to 17.34, according to FactSet. The index is a gauge of expected volatility in the the stock market over a 30-day time horizon.

As the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have climbed to never-before-seen levels, stock valuations are attempting to follow suit. Wall Street appears set to enter the new year with the second priciest stock market on record -- and history offers investors a dire warning of what's to come.

Exxon Mobil was one of the strongest forces lifting the market. It climbed 2.5% after increasing its forecast for profit over the next five years, thanks in part to strength for its fields in the Permian basin in the United States and off Guyana’s shore.

“The market continues to [hit] record highs on the back of strong earnings and easing U.S.–China trade tensions,” said Mark Hackett, chief market strategist at Nationwide, who calls the current state of “steady growth without irrational exuberance” a ”Goldilocks environment.”

Just a few weeks ago, the stock market stumbled over fears that artificial intelligence stocks might be in a bubble. Now stocks are back within reach of a record high.

The analysts have an average price target of $21.81, which implies SentinelOne stock could climb by 45% over the next 12 to 18 months. However, the Street-high target of $30 suggests the stock could almost double instead.

The S&P 500 inched up by 0.1% and is just 0.5% below its all-time high. The Dow Jones Industrial Average dipped 31 points, or 0.1%, and the Nasdaq composite rose 0.2%.