Can the S&P 500 Index outperform gold and bitcoin in 2026?

The S&P 500 Index is up nearly 14% this year after rallying to a new all-time high of 7,844. Although it has since pulled back slightly to 7,801, it is still the favorite to be the best performer in 2026, when compared to bitcoin and gold.

However, while Polymarket traders seem to agree with my assessment that the S&P 500 Index is set to post the biggest gains in 2026 compared to gold and bitcoin, I think the 67% chance they're currently pricing in is significantly underpriced.

As of this writing, traders can buy a yes contract on the S&P finishing as the year's top performer for $0.70, compared to $0.22 for Bitcoin (21% chance) and $0.12 for gold (11% chance).

The market overall has more than $940k in volume, with Bitcoin attracting the bulk of it, with over $453k, gold at second with over $287k, and the S&P 500 barely topping $200k in third.

Why do I think the contract is underpriced?

It is all about what it would take to topple the S&P 500 Index’s performance heading into the tail-end of the year. With a near 14% gain this year already, and more AI-driven bull run expected as more earnings results stream in at the end of October and through November, the S&P 500 Index is on course to end the year with at least late-teens gains.

On the other hand, Bitcoin is only 4% up this year after spending a significant amount of time making sideways moves, while gold has wiped out all of its 2026 gains, despite rallying to new all-time highs in January. The yellow metal is down 5% this year.

Moreover, the S&P 500 Index has averaged about 6.4%-6.6% gains in the fourth quarter during a US election year. And according to CFRA Research, Q4 tends to be the strongest quarter for the S&P 500 Index, even stronger during a midterms election year.

The stock market tends to be more optimistic after the midterms because a lot of uncertainties about policy are cleared.

Currently, Polymarket traders expect the Democrats to win both houses, as Predictbook reported. 

Another factor that could play a part in a strong S&P 500 Index finish is the delayed second Fed rate hike in 2026, after Fed’s Williams said no urgency is needed. An October hike would have probably boosted the gold price, adding more pressure on risk assets like AI stocks and bitcoin. 

However, with the next hike now looking more likely to come in December, chances are there won’t be enough time to have a significant negative impact on the S&P 500 before the year ends.