Investors should prepare for significant volatility in 2026, according to Fundstrat Global Advisors' Mark Newton. While maintaining a bullish year-end S&P 500 target of 7,300, Newton warns that the path there will include a “consolidation,” potentially triggering a market drawdown starting this spring.

The Coming Consolidation

Speaking to Yahoo Finance, Newton outlined a roadmap for the year that begins with strength but quickly pivots to turbulence.

He predicts the current rally will persist for another six to eight weeks before stocks hit a wall. “I do expect it’s going to be a year of consolidation and choppiness… I think it’s going to start likely in the latter part of February, early March where we start to see some pressure in stocks that likely lasts down to May,” he said.

The primary catalyst for this volatility is exhaustion in the technology sector. Newton notes that after a “phenomenal three-year run,” bellwethers like Nvidia Corp. (NASDAQ:NVDA) and Microsoft Corp.