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Truist's Keith Lerner maintains a constructive market outlook for 2026, citing record forward earnings estimates, a resilient nine-week S&P 500 winning streak, and technology-led momentum as the pillars of the bull case.
- Truist forecasts low double-digit U.S. earnings growth in 2026, with forward estimates at cycle highs across large, mid, and small caps.
- The tech sector has gained more than 40% since March 30, accounting for nearly 70% of global market gains year-to-date.
- Lerner positions the cycle at the "seventh inning stretch" — advanced but not exhausted, with historical precedent favoring continued upside.
Lead
Truist Wealth's Chief Investment Officer Keith Lerner reiterated on June 24, 2026, that the current bull market still deserves the benefit of the doubt, pointing to record-high forward earnings estimates, a nine-week winning streak for the S&P 500, and AI-driven capital spending as the primary supports for an equity market that has confounded bearish narratives throughout the year.What Happened
In his June 2026 Market Navigator, Lerner framed the equity cycle as sitting at the "seventh inning stretch" — a market neither in its early innings nor at its final out. The characterization carries deliberate weight: Lerner notes that of the seven prior bull markets extending beyond three years, every single one posted gains in year four.
That historical baseline is reinforced by a powerful earnings backdrop. Forward earnings estimates have climbed to cycle highs not only for large-cap equities but across mid-cap and small-cap indices as well as emerging markets — what Lerner describes as a broadening earnings boom. Truist projects low double-digit profit growth for U.S. corporations through 2026, supported by tax relief measures, Federal Reserve policy normalizing toward a 3% funds rate, and sustained AI and technology infrastructure spending.
U.S. economic growth is forecast to accelerate to 2.3% this year, underpinned by approximately $158 billion in aggregate tax refunds returning to consumers and a stabilizing tariff environment after months of headline volatility.
Technology at the Center
No single force has shaped the 2026 market narrative more decisively than technology. The sector gained more than 15% in May alone and has surged over 40% since March 30, reaching record highs. Nearly 70% of global equity market gains this year trace directly to the tech sector, a figure that rises to an estimated 95% in some emerging market indices.
The breadth of tech's advance has widened as well. Small-cap technology stocks are up 52% year-to-date, more than doubling the 22% gain recorded by large-cap tech peers — a signal that investor conviction has moved beyond the handful of mega-cap names that dominated earlier in the cycle. AI-driven capital expenditure now approaches 5% of U.S. GDP, surpassing the proportional spending seen at any point during the internet boom of the 1990s.
Lerner has maintained a positive view on technology throughout the year and as recently as mid-June stated on CNBC that he would "still stick with tech in this market." Communication services has been upgraded to an attractive rating, joining tech and energy as the three sectors displaying the strongest earnings momentum.
Market Breadth and Resilience
The S&P 500's nine-week winning streak and fresh record highs have arrived with unusual calm. Only one drawdown exceeding 5% has occurred in 2026, compared with a historical average of three such pullbacks per year. The index's primary uptrend remains intact, with the broad market trading above long-term moving averages — a condition Lerner identifies as a core pillar of the bull case.
Historical pattern analysis supports the constructive view: when the S&P 500 has gained 15% or more over a rolling 30-day window, equities have added to those gains 94% of the time over the following year.
Not every corner of the market commands equal confidence. Truist downgraded international developed-market equities from neutral to less attractive in June, citing deteriorating relative earnings trends, geopolitical headwinds, and the prospect of rate increases from European central banks. Emerging markets retain appeal on pullbacks, while gold is held at a neutral tactical rating despite long-term strategic value supported by sustained central bank buying.
Fixed Income and Rates
On the bond side, 10-year Treasury yields hovering near 4.5% offer what Lerner characterizes as attractive risk-reward for longer-dated maturities, providing portfolio diversification at levels not reliably available for much of the prior decade. Truist favors high-quality fixed income and a neutral duration posture, noting that investment-grade credit spreads remain tight — a symptom of the same risk appetite animating equities.
Risk Factors in Focus
Lerner has not dismissed the case for near-term caution. As recently as June 3, he noted publicly that stocks were "due for a rest" after a powerful run, and warned that the market's ability to absorb negative surprises is reduced following the recent advance. Oil price swings, rate trajectory uncertainty, and the potential volatility surrounding a pipeline of large-cap technology IPOs represent near-term risks that could interrupt but are unlikely to reverse the underlying trend.
The broadening away from Magnificent Seven technology names — which have turned negative for the year even as the broader market trades higher — reduces single-stock concentration risk and supports the case for sustained participation across market segments.
