Analysts believe that without a significant surge in GDP driving interest rates higher, the prospect of the stock market doubling is unrealistic.

Uncertainty Surrounds Trump's Stock Market Predictions

President Trump's assertion that the S&P 500 is poised for another dramatic surge is beginning to appear less certain.

Ben Emons, who leads FedWatch Advisors, explained to Yahoo Finance's Opening Bid that, "If the stock market were to double, it would signal that the economy itself has doubled in size."

Emons cautioned that for the market to achieve another year of exceptional, double-digit returns, the U.S. economy would need to experience extraordinary growth.

However, Trump maintains a more optimistic outlook. Speaking at the World Economic Forum in Davos, he dismissed the recent market downturn as insignificant, attributing the decline to "Iceland"—though he likely meant Greenland.

Referring to the Dow Jones Industrial Average, Trump stated, “The future of the stock market is incredible. It’s going to double. We’ll reach 50,000, and this will happen in a relatively short time because of all the positive developments.”

Emons, however, believes such a leap depends on several crucial elements. “For the market to double, you’d need GDP growth of 5% or more, which would likely push interest rates higher as well,” he noted.

This skepticism comes as the Bureau of Economic Analysis recently reported a strong 4.4% GDP growth for the third quarter. While this figure points to a robust economy, it has also driven the 10-year Treasury yield up to a key level of 4.24%.

As 2026 begins, the 10-year yield has become a pivotal factor for the markets. Rising yields reduce the present value of future corporate earnings and make borrowing more expensive for consumers and businesses alike.

This dynamic puts the economy in a delicate situation. If GDP continues at these high rates—or climbs to the 5% some optimists hope for—the Federal Reserve will have little reason to keep lowering interest rates.

“The Fed might pause for a while,” Emons suggested. The recent uptick in the 10-year yield indicates that bond investors are already anticipating a longer period of steady rates than many had expected.

DAVOS, SWITZERLAND - JANUARY 22: U.S. President Donald Trump (center) attends a signing ceremony at the World Economic Forum in Davos, Switzerland. (Photo by Chip Somodevilla/Getty Images)

According to Emons, this situation imposes a clear ceiling on the S&P 500’s potential. Achieving a market “double” would require a rare blend of rapid economic growth and low interest rates—a so-called Goldilocks scenario that history shows is both unusual and short-lived.

Emons also observed that the current surge in yields is “mirroring the expansion in both the stock market and GDP.” However, as the economy grows, bond yields tend to rise, increasing competition for investment dollars. This is why market participants are largely tuning out political distractions, such as recent speculation about acquiring Greenland.

Market Eyes on Growth and Its Consequences

Investors are now watching the Atlanta Fed’s 5.4% GDP projection for the fourth quarter. While policymakers may aim for record-breaking expansion, the market is recognizing that such rapid growth can come with drawbacks. In particular, it creates a challenging environment for stocks—especially growth companies that depend on inexpensive financing to drive their businesses forward.