Is a major upheaval in the financial markets in 2026 imminent? Wall Street predicts a 23% plunge in the S&P 500, and the Federal Reserve may accelerate rate cuts.

【CryptoWorld】Wall Street’s well-known short seller recently issued a bold market forecast, attracting considerable attention.

According to analysis, a significant shift in investment style will occur in early 2026—large amounts of capital will flow from technology stocks to non-technology stocks, shifting from growth stocks to value stocks. This adjustment could cause considerable turbulence in the stock market. The forecast suggests that the S&P 500 index may close at 5280 points by the end of 2026, representing a 23% decline for the year. Meanwhile, the Nasdaq Composite Index is expected to fall even more sharply, down 31%.

Exchange rates are also experiencing changes. The US dollar continues to weaken, while the Japanese yen has appreciated significantly, with USD/JPY expected to reach 115 by year-end. In contrast, gold is moving in the opposite direction, continuously hitting record highs.

Concerns about economic prospects are intensifying. Expectations of a recession in the US are growing stronger, which may force the Federal Reserve to change its strategy. It is anticipated that by the second half of 2026, the Fed will accelerate its rate cuts. By the end of the year, the federal funds rate could drop to 2.25%, and the yield on the 10-year US Treasury bond could fall to 3.1%.

These series of changes will have a profound impact on global asset allocation and are worth ongoing attention.