Here’s (Almost) Everything Wall Street Expects in 2026

Citi

We expect global growth to remain on a broadly similar track for the next two years, with the economy expanding 2.7% in 2026 and 2.8% in 2027. Tariff pressures will take a further bite out of growth, but the overall effects look manageable.

Goldman Sachs

The cycle extends: Sturdy global growth coupled with non-recessionary Fed cuts should be positive for global equities, but tensions with "hot valuations" may increase volatility. We expect sturdy global growth of 2.8% in 2026, versus a consensus forecast of 2.5%. The US is likely to outperform substantially (2.6% vs. 2%) because of reduced tariff drag, tax cuts, and easier financial conditions.

Vanguard

In 2026, the US is positioned for a more modest acceleration in growth to about 2.25%, supported by AI investment and fiscal tailwind from the One Big Beautiful Bill Act. The first half of the year may be softer given the lingering stagflationary effects of tariffs and labor supply plateauing, as well as yet-to-materialize broad-based gains in worker productivity.

BlackRock Investment Institute

We see AI capital spending still supporting growth in 2026, with the contribution to US growth from investment totaling three times its historical average this year. This capital-intensive boost is likely to persist into next year, allowing growth to hold up even as the labor market keeps cooling.

BNY

We expect the US economy and markets to continue setting the tempo for the rest of the world. Rate cuts and lower corporate tax rates should support an extension of economic growth.

Capital Group

Investors should expect greater stability in the year ahead as global trade disputes subside, government stimulus measures kick in, interest rates move lower, and the boom in artificial intelligence spending continues to drive economic growth.

Carmignac

Global growth will be unchanged at 3%, still driven by the AI capex boom, national security spending and fiscal profligacy. Weak, uneven growth forces governments further down the populist road, with central banks constrained into monetizing this fiscal blind run.

DWS

We enter 2026 under the motto “Rational Exuberance.” We expect a good investment year, especially for equities. Modest economic growth, stronger earnings growth, and non-restrictive monetary policy should create a favorable environment for many equities and corporate bonds.

Federated Hermes

Productivity gains, renewed economic growth, margin expansion and recently released "animal spirits" — accompanied by benign central bank policy — are all driving global markets higher.

First Abu Dhabi Bank

2026 is generally expected to witness a modest improvement in economic activity and economic growth levels. We expect the global economy to avoid recession in 2026 but do expect the macro landscape to continue to struggle to regain its pre-pandemic buoyancy, with global economic growth seen moderating to around 3.1% in 2026, compared to 3.2% in 2025 and 3.3% in 2024.

Franklin Templeton

In 2026, we foresee broadening opportunities across global capital markets, driven by attractive profits growth outside the US and by global monetary policy easing.

Global X

We believe there is ample reason for broad optimism on the US economy and risk assets heading into 2026. However, we also believe 2026 sets up for more targeted thematic exposures.

HSBC

We believe the key drivers behind our positive view are likely to persist. The rapid adoption of AI should remain a defining theme in 2026 globally.

iCapital Research

While the economy is at a delicate balance to start 2026, we think growth will be supported by AI investment, wealth effects, and supportive monetary and fiscal policy throughout the year. US economy expected to grow near trend.

JPMorgan Wealth Management

A rate-cutting cycle from the Fed, along with the benefits of reduced economic policy uncertainty, should help global growth rebound toward a trend-like pace. Lower short-term rates in the US can boost risk assets such as global equities and credit. A steady growth outlook, among other factors, will likely keep long-term bond yields range bound. In all, we expect another solid year of returns for multi-asset portfolios.

Lazard Asset Management

Expect 2026 to be a year of relatively muted growth with US and Chinese GDP decelerating and euro zone and Japanese GDP accelerating. US exceptionalism may fade as non-US opportunities continue to outperform — aided by a weaker US dollar. There is little doubt that AI will boost productivity, but in 2026, investors are likely to discriminate more skeptically between winners and losers.

LPL Financial

The US economy is expected to experience a modest slowdown in early 2026 before rebounding later in the year. Underlying resilience from AI-driven investment and fiscal spending should help offset weaker household activity and steer the economy clear of a recession.

Morgan Stanley

Risk assets are poised for a strong year in a friendly policy and macroeconomic environment, with US stocks outperforming peers. US government bonds are likely to weaken after a rally in the first half of the year.

Pictet Asset Management

Broadly speaking, we expect world GDP to grow at 2.6%, roughly in line with its long-term trend rate, which will limit inflationary pressures. Solid growth and liquidity infusions makes for a potent combination for riskier asset classes.

Russell Investments

We see three inflection points that are likely to drive the investment landscape into 2026 and beyond. First, AI adoption is likely to accelerate further, reshaping energy demand, productivity, and profitability across sectors. Second, we see potential for the US economy to regain momentum as the drags from tariffs and policy uncertainty fade and the tailwinds from loose financial conditions and fiscal stimulus build. Third, we expect a broadening opportunity set, with greater performance dispersion as capital rotates toward new areas of leadership in the next phase of global growth.

Schroders

Growth in the US has held up, and strong capex spending and earnings will give momentum into 2026. Some market trends are extended, but we don’t think valuations are yet egregious: markets have further to go in the near-term.

Societe Generale

Our Multi Asset Portfolio works around a central scenario that factors in i) an extended AI-driven economic boom, and ii) decreasing cost of capital. The overall backdrop is risk-on, in our strategists’ view.

Tallbacken Capital

The broader macro framework will continue to be constructive for risk assets. The confluence of accommodative fiscal and monetary policies, coupled with a massive fixed-asset boom and deregulation, is a setup for continued risk appetite.

Truist Wealth

Global economic growth is projected at 3.1% in 2026, slightly below 2025 and 2024, with the US, Europe, and emerging Asia driving most of the expansion.

UBS

Powerful trends in capital expenditure and accelerating adoption are likely to drive further growth for AI-linked stocks. The economic backdrop in 2026 should support equities more broadly, with growth accelerating in the second half of the year.

Allspring Global Investments

The year ahead will have its challenges — but we also expect to see opportunities arise. The US and international markets may take distinct paths, but amid the differences, one powerful theme stands out: our expectation for continued global growth.

Apollo Global Management

We are bullish on the medium-term outlook for the US economy. However, in the short term, slowing growth — driven by trade frictions, immigration restrictions and risks from a deepening K-shaped economy — combined with inflation stuck near 3% puts the US squarely in a stagflation environment. We can therefore expect higher-for-longer interest rates to remain, with direct implications for all rate-sensitive investment strategies.

Bank of America

Despite lingering concerns, our team remains bullish on the economy and AI. We are optimistic on the two most influential economies, expecting above-consensus GDP growth for the US and China. Furthermore, concerns about an imminent AI bubble are overstated, and we expect AI investment to continue to grow at a solid pace in 2026.

BCA Research

A clear and present danger remains for the US and global economies: Tepid labor market conditions may morph into a sharp and self-reinforcing rise in unemployment, driven by the fear among consumers that they may lose their jobs. Investors should maintain a neutral stance toward stocks in a multi-asset portfolio. The trend in the US labor market suggests we are more likely to downgrade than upgrade stocks next year.

Bel Air Investment Advisors

While the labor market remains a concern, improved visibility into the interest-rate cycle and tax benefits from the One Big Beautiful Bill Act should support both consumer and corporate spending in 2026 relative to 2025. This supports the Fed’s GDP forecast of approximately 2.5% growth and analysts’ expectations for earnings growth, which should help stabilize the labor market, if not modestly improve it.

BNP Paribas

We see a continued solid pace of activity worldwide as existing strength is buoyed by further rate cuts in the US, China and several emerging markets, as well as additional fiscal stimulus in the euro zone and Japan, deregulation, and AI-related investment plans.

Brandywine Global

We anticipate ongoing convergence in relative growth rates after a prolonged period of US exceptionalism. Global investors remain structurally overweight dollar assets, with both economic and geopolitical incentives to reduce these exposures over time.

Capital Economics

2026 will bring further evidence of the transformative potential of AI, but the economic gains will be unevenly distributed. The technology’s boost to growth next year will be centered on the US and will come mainly from the surge in capital spending needed to build AI infrastructure.

Comerica Wealth Management

Global GDP growth is projected to hover around 3%, reflecting a steady pace that balances optimism with caution. The US is recovering from previous tariff-induced shocks, bolstered by ongoing consumer spending and significant infrastructure investments. Meanwhile, Asia remains the primary engine of growth, with India, Korea, and Southeast Asia leading the advance. China's economy is stabilizing, showing moderate growth rates between 4% and 5%, while Japan experiences modest gains driven by technological innovation, export demand, and stimulative policies.

Invesco

We enter 2026 with optimism, confident in the durability of businesses, encouraged by the direction of central banks and fiscal support, and mindful of the need for diversification as the market evolves.

Janus Henderson

We believe 2026 will see ongoing impacts as governments implement economic policies to promote national interests. This has the potential to shape all areas of markets, with trade, technology, and energy being obvious examples.

JPMorgan Asset Management

Our base case is that monetary and fiscal fuel continues to power an economic expansion. But there is a risk that policy "excess" leads to either an asset bubble, or inflation. Investors should think carefully about building up protection against these outcomes.

JPMorgan Chase & Co.

We expect the global economy to remain resilient in 2026, with AI investment continuing to drive market dynamics and support growth. Downside risks remain elevated, given weak business sentiment and the ongoing slowdown in the labor market.

Lombard Odier

We expect soft global growth to be sustained in 2026. Tariffs will slow global trade and dent profits for businesses. Yet fiscal policy remains expansionary in many major economies, while monetary policy will provide support.

Macquarie

We expect 2026 to be another constructive year for investors. Despite heightened trade tensions, shifting supply chains and challenging fiscal backdrops, global growth remains resilient while AI is starting to reshape productivity and capital flows.

NatWest

While we remain alert to potential shocks, the outlook for 2026 and beyond is broadly constructive. Economic resilience, supportive policy and structural innovation should underpin healthy corporate earnings – not just in the year ahead but over the coming decade.

Northern Trust Asset Management

We expect the global economy in 2026 to continue to grow by maintaining momentum and avoiding recession, despite ongoing risks. Equities will be supported by strong fundamentals, fixed income investors must contend with a new inflation regime, and alternatives will prove central to multi-asset portfolio construction.

Principal Asset Management

The US economy remains resilient, powered by strong balance sheets and AI-led investment. Fiscal and monetary policy are simultaneously stimulative, an unusual dynamic outside of recession that supports risk assets. We maintain a “cautiously risk-on” stance, overweighting equities, credit, and other anti-fragile assets.

Robeco

2026 is expected to deliver a rare, short-lived global upswing, driven by easing trade tensions, a manufacturing rebound, and central bank support. But this harmony may be fleeting, with new risks on the horizon.

State Street

Regional policy shifts suggest a more supportive macro backdrop for global growth in 2026, even as trade uncertainty and geopolitical tensions persist. With an inflation trajectory trending lower, US policy rates likely to fall as the Fed takes stock of a softening labor market, and policy levers turning stimulative, we have a supportive environment for risk assets.

Wells Fargo Investment Institute

We believe tariff impacts may slow the economy and nudge inflation higher coming into 2026, before positive policy and technology spending trends reverse those conditions into year-end. The economic improvement should support financial markets through the year.

Amundi Investment Institute

Global growth will moderate in 2026, but will stay resilient as the extended cycle continues, led by innovation and policy support. Our stance is mildly constructive on risk assets, with increased diversification across the board and a range of strategic hedges, such as alternative assets, gold and selected currencies.

Charles Schwab

Global economic growth may slow in the near term but then accelerate as 2026 progresses, owing to the lagged effect of interest rate cuts on business and consumer behavior, increased fiscal support, and moving past the peak in tariff uncertainty.

Deutsche Bank

Given the positive macro environment, we expect 2026 to be another constructive year, albeit with continuing market volatility. The continued rise of AI may open up new growth opportunities, which should encourage companies to increase their investment activity, potentially giving fresh impetus to both private and public consumption.

Evercore ISI

More reward/more risk in an environment where the economy is forecast to remain recession-free, monetary and fiscal stimulus is abundant (with the White House having an eye firmly affixed on the midterm elections) all driving another year of solid earnings growth. Buckle up but stay invested. And remember, volatility creates opportunities for the active investor, while it creates entry points for the patient buy and hold investor.

Fidelity International

There is a disconnect between the positive short-term environment for risk assets, and a broader structural instability. Global fragmentation, a depreciating dollar, US Federal Reserve independence, and AI capex trends are themes to watch in 2026 and beyond.

Future Standard

Economic fundamentals remain healthy, but both the economy and markets maintain an uneasy reliance on AI. Combined with persistent policy risks and lofty asset prices, there is a compelling case for diversifying outside public markets.

Goldman Sachs Asset Management

Uncertainty from shifting central-bank policies, geopolitical tensions, and structural change will define the macro backdrop. These forces create opportunities across public and private markets, from dislocations to secular growth themes and alternative sources of return.

Ned Davis Research

At 3% for 2026, global real GDP growth should be little changed from 2025. But that will require supportive monetary and fiscal policies to offset the continuation of policy uncertainty and geopolitical risk.

Neuberger Berman

The macro setup looks supportive for the US and parts of Asia, particularly China and Japan. Europe, by comparison, looks more challenging due to a tougher mix of macro, policy and political factors.

Nuveen

A potent mix of fiscal initiatives hits in 2026 across multiple markets: tax cuts, increased defense spending, reshoring subsidies and the ongoing (if uneven) transition to renewable energy. But this combination risks keeping inflation well above central bank targets.

Pimco

Macro conditions could provide a tailwind for value in the near term. An outlook for trend-like US economic growth should help broaden earnings growth across sectors in 2026. In our view, the best scenario for value is if the Fed continues cutting rates into reaccelerating and broadening growth.

ABN AMRO

The advent of AI, China’s rise, and the US’s relative decline offer challenges but also opportunities. The trade war weapon du jour has shifted from tariffs to chokepoints, creating new challenges for governments and manufacturers. Fiscal troubles in France and the UK are likely to remain a worry. Global growth has been remarkably resilient given the headwinds. We expect that resilience to continue in 2026, albeit with considerable risks.

Barclays Private Bank

The global economy enters 2026 on a slower but still resilient path. Growth is moderating to slightly below trend, inflation seems to be stabilizing, and the prospect of rate cuts offers support. Recession risks have eased, but regional growth prospects are uneven, as the US cools, Europe stabilizes, and Asia regains momentum.

Columbia Threadneedle

Global growth is expected to moderate, and interest rates are likely to stabilise at lower levels. Investors face markets with the scope for further appreciation, but the factors driving performance will differ across regions, sectors and asset classes.

T. Rowe Price

The US economy is shaking off the 2025 growth scare, but the euro zone may lag as tariff front‑loading weighs on manufacturing. Overall, the market backdrop is complex, but the coming year is likely to bring broader participation. The AI cycle remains powerful, yet it is evolving; fiscal expansion, reindustrialization, and valuation gaps are opening multiple paths to growth.

UniCredit

In our view, the baseline scenario for 2026 is one of continued geoeconomic friction without it erupting into a full-blown trade war. Policymakers and businesses will need to navigate this new normal. As the saying goes: hope for calm but prepare for (some) turbulence.

BNP Paribas Asset Management

As we move into 2026, we see markets in a much more positive frame of mind about the growth outlook, but one that varies from place to place.

LGIM

Looking ahead, consensus forecasts reflect a return to equilibrium in a number of economies during 2026, with global growth around trend, unemployment close to its natural rate, inflation potentially on a path towards target and many central bank rates moving to near "neutral."

Capital Economics

Our above-consensus forecast for the US economy to grow by 2.5% next year. Elsewhere the picture is less encouraging.

Citi

We expect a modest easing in growth in developed markets from 1.7% to 1.6%, and a slowdown from 4.2% to 4% in emerging markets.

Federated Hermes

Nominal GDP growth should accelerate in 2026. Given an expected inflation rate of 2.5%, we believe nominal US GDP should run north of 5% in 2026 and 2027. The labor market should remain "not too soft, but not too tight." With the Fed now in a (belated) cutting cycle, we expect employment to pick up.

Robeco

We expect to see overall US real GDP growth for 2026 at 2.1%. Our recession monitor flags a 20% US recession risk. Our base case is for the US CPI to show a random walk around 3%, with euro-zone inflation almost 100 basis points lower.

Robeco

Our base case foresees a further catch-up in Germany versus the US growth rates in 2026. There is still ample room for non-inflationary growth, as we expect to see the euro zone grow 1.6% in 2026. The lagged impact of past ECB easing, spending of excess household savings (2% above 20-year average), a higher fiscal impulse (contributing 0.6% to growth in 2026) and recovering export demand are likely drivers here.

Truist Wealth

We expect an uptick in the pace of the US economy to 2.3%, supported by relief from tax changes, Fed rate cuts towards 3%, greater stability on tariffs, and ongoing AI- and tech-driven capital spending. Collectively, these factors should help extend the cycle.

UBS

In the US, growth is expected at 1.7%, backed by more favorable financial conditions and accommodative fiscal policies. Euro-zone GDP is forecast to grow at 1.1%, while APAC’s economic growth should reach the 5% range.

UniCredit

The US economy remains solid, with growth projected at 2.1%, driven by fiscal support and AI investment. Inflation will stay above target at 2.9%, while the Fed is expected to deliver two rate cuts by year-end, bringing rates to 3.5%.

UniCredit

The euro zone shows resilience, with GDP expected to rise 1%, aided by fiscal stimulus and NGEU investments. Germany's fiscal bazooka begins to fire, while France faces political uncertainty and Italy benefits from EU recovery funds. Inflation is set to hover near 1.8%, allowing the ECB to keep rates on hold at 2%.

UniCredit

CEE growth is set to accelerate in 2026, driven by stronger external demand, investment, and EU fund absorption, with GDP expected between 2.0% and 3.3%.

UniCredit

In China, growth slows to 4.1%, reflecting structural headwinds from real estate stress and weak domestic demand. The PBOC is likely to ease further to support activity.

UniCredit

Japan posts modest growth (0.8%) amid gradual BOJ tightening, while the UK remains stuck in low gear (1%) as fiscal tightening and weak productivity weigh on prospects.

Amundi Investment Institute

US growth should experience a shallow slowdown in the coming quarters, before picking up to reach 1.9% in 2026 and 2.0% in 2027, remaining below potential.

Amundi Investment Institute

In Europe, we expect growth to remain below potential at 0.9% in 2026, then to recover at 1.3% in 2027, both in the euro zone and in the UK.

Apollo Global Management

US growth will likely soften over the next few quarters as tariffs continue to be implemented, while inflation remains above target at 3%, keeping interest rates higher for longer. This slowdown will most likely be followed by an AI-fueled recovery. Put another way, we are not in for a recession.

Bank of America

US GDP growth of 2.4% in 2026. The US Economics team’s above-consensus views are fueled by several factors: an expected boost by the One Big Beautiful Bill Act; increased business investment due to restoration of Tax Cuts and Jobs Act benefits; trade policy; fiscal stimulus; and the lagged effects from rate cuts by the Federal Reserve.

Bank of America

We now expect 4.7% China GDP growth in 2026 and 4.5% in 2027. With positive signs emerging from recent trade talks and stimulus taking hold, risks to our forecast are skewed to the upside.

BNP Paribas

Our most pronounced non-consensus view is on the euro zone, where we expect fiscal stimulus to drive stronger growth than many other forecasters do.

Capital Group

Capital Group economists are slightly less optimistic about the prospects for the global economy than the IMF, but they still expect to see solid growth in the US, Europe, Japan and most emerging markets. That’s primarily due to more clarity on US tariffs and trade policy.

Capital Group

US and European growth trajectories to converge as the US slows and EU benefits from fiscal tailwinds. China shows signs of stabilizing and Japan is on track for fiscal expansion. Real global growth of 2.3% to 2.5%.

Capital Group

US real GDP growth at 1.6% to 2.2%. Tariff and job market weakness could still create a drag in the first half. AI spending and favorable policies suggest the potential for upside surprises.

Capital Group

Europe real GDP growth at 1.4%. Growth and inflation could be slightly higher than last year. ECB to hike, BOE to cut. No end to fiscal woes in UK and France.

Carmignac

In the euro area, reacceleration thanks to the Merz plan and lack of adjustment in France. ECB will stand pat given the glacial pace of disinflation, provided the OAT market remains well behaved.

Carmignac

In Japan, we expect Takaishi’s supplementary budget and bullying of the BOJ to backfire. Markets will then force a policy U-turn that threatens a messy unwind of yen carry trades.

Citi

In looking at the next two years’ growth, we see 2026 performances picking up a bit in South Korea, Australia, Sweden and Poland; rising but remaining subdued in Germany and Mexico; and yielding somewhat softer outcomes in India, China, Singapore, Spain and Brazil.

Deutsche Bank

US growth is likely to be supported by the continuation and introduction of extensive tax relief measures, as well as increased spending on security and defence under the One Big Beautiful Bill Act. The three interest rate cuts expected from the Federal Reserve by the end of 2026 and planned deregulation in the banking sector should also further improve the investment and consumption environment.

First Abu Dhabi Bank

In the euro zone the outlook remains fragile and real GDP growth will likely fail to exceed 1% over the coming year. We anticipate euro area real GDP growth of 0.9% for 2026. Under such conditions, the ECB (and the Bank of England likewise in the UK) will not want to ease rates too far and risk over-stimulating a fragile economy.

First Abu Dhabi Bank

Our macro outlook for the UK economy in 2026 continues to be one of tepid economic activity, characterized by sluggish growth and sticky, above-target inflation. From the current Bank of England Bank Rate of 4%, we forecast that the neutral rate should be close to 3% and that the Bank should ease policy to that level by the end of the first half. We forecast UK real GDP growth to be an anemic 1.2% in 2026, down from 1.4% in 2025, before perhaps picking up just slightly, back to around 1.4% in 2027.

First Abu Dhabi Bank

The macro outlook for China in the coming year will likely be characterized by a slowdown in headline real GDP growth from 5% in 2025 to 4.5%/4.6% in 2026. Within the context of this slowing growth scenario though, we expect targeted stimulus to again underpin macro performance and contribute to a modest pickup in quarter-over-quarter growth in the first half of 2026.

Goldman Sachs

We also expect China to hold up well (4.8% vs. 4.5%) as strong exports outweigh sluggish domestic demand.

Goldman Sachs

Despite the longer-term challenges, our 2026 forecast for the euro area (1.3% vs. 1.1%) is reasonably upbeat owing to fiscal stimulus in Germany and strong growth in Spain.

JPMorgan Asset Management

In France, tough decisions – and fiscal consolidation – have now largely been postponed until the 2027 presidential election. France is, therefore, unlikely to derail the European recovery in 2026.

JPMorgan Chase & Co.

Activity momentum in the euro zone is likely to improve in 2026, thanks to better credit impulse and the rollout of fiscal stimulus. Earnings are expected to grow by 13%+ next year, supported by stronger operating leverage, reduced tariff headwinds, easier comps and better financing conditions.

JPMorgan Chase & Co.

In China, growth should outperform in the first half of the year — especially the first quarter — thanks to the delayed execution of supplementary fiscal measures and the usual front-loading of budget spending.

LGIM

Euro-area growth is expected to strengthen gradually from a turn in the global manufacturing cycle, with the potential for earlier rate cuts boosting interest-rate sensitive parts of the economy and government spending in defense and infrastructure gaining traction, notably from Germany.

LGIM

China is expected to grow in the 4-5% range with government support and a diminished drag from the property sector.

Lombard Odier

We expect below-trend and below-potential US growth in 2026. Business investment should remain strong, particularly in AI, as should government spending. The Fed’s interest rate cuts from restrictive levels should boost manufacturing activity and could finally see a struggling housing market bottom out. Yet higher unemployment and above-target inflation should weigh progressively on real incomes, weakening consumer spending, the principal driver of growth.

Lombard Odier

The outlook in Europe is stabilizing. We expect the euro-zone economy to expand around its potential rate of 1% in 2026, with interest rates on hold and inflation remaining roughly in line with target over the year.

Lombard Odier

In China, growth has also stabilized, thanks to periodic injections of policy support which we expect to continue in 2026. Expect a gradual slowing in growth to just above 4% in 2026. It should provide an anchor for other economies in the region, even if it is not enough to lift our outlook of unspectacular global growth.

Macquarie

We expect global GDP growth to be around 3.5% in 2026, driven by ongoing strength in developed-world consumer spending, further growth in investment into AI infrastructure, and modestly easier monetary policy.

Morgan Stanley

European and emerging market equities aren’t likely to benefit from similar tailwinds that are boosting US stocks. Tepid forecasts for growth in the euro zone and structural challenges, with the region losing ground in manufacturing to China, cloud the outlook for European equities. Chinese stocks face headwinds from the country’s slow reflation progress.

Ned Davis Research

We project US real GDP will increase 1.75%-2.25% in 2026. We estimate that the euro-zone economy will expand 1.1%. We expect real GDP growth in China to slow 4.25%-4.50%.

Northern Trust Asset Management

Across global regions, we expect real GDP annual growth under 2%, with the US and Canada leading with estimated annual growth of 1.5%.

Nuveen

We expect global growth to outperform expectations in the year ahead. In the US, euro area and UK, we forecast stronger-than-consensus growth. We also expect sequential improvements in Japan and emerging markets. China presents potential concern – we expect further deceleration, though at a gentle, nondisruptive pace.

Pictet Asset Management

The US economy will lag many of its peers. There, we expect growth to slightly undershoot potential while inflation remains awkwardly high for the first few months of next year, before easing in the second half. Our economists forecast US GDP growth to dip to 1.5% in 2026 from 1.8% in 2025, while they see inflation rising to 3.3% from 2.9%. Given the US’s importance in the global markets, this could act as a brake on equity markets.

Schroders

We are optimistic about the outlook for the US economy in 2026 with both fiscal (as the full impact of the One Big Beautiful Bill Act hits) and monetary easing (spurred by a softening labor market in mid-2025) working their way into the economy.

Societe Generale

We expect the massive distribution of NGEU funds from the EU to member countries to accelerate by year-end, supporting peripheral economies’ growth in the coming years as infrastructure projects are implemented. Consequently, undervalued peripheral European assets are likely to continue outperforming core assets in both bonds and equities.

Tallbacken Capital

While we expect neither boom nor bust next year, we do expect increasing divergence within the economy. As the economy becomes increasingly K-shaped, asset managers will have to recognize that the stock and credit markets will also become increasingly K-shaped: in a world increasingly defined by AI disruption and the re-engineering of global supply chains, scale matters.

UniCredit

Global GDP growth is forecast at 3.1%, supported by adaptive private-sector strategies despite entrenched trade frictions.

Wells Fargo Investment Institute

We anticipate the US economy will gather momentum in 2026, as favorable policy tailwinds and durable investment trends converge to overcome residual challenges from trade and immigration uncertainties.

Allspring Global Investments

As the effects of lower interest rates make their way through the US economy in 2026, growth should gradually recover. With lower mortgage rates and robust real earnings, a growth rate of 2-3% should be achievable.

Allspring Global Investments

Outside the US, we expect growth to trend slightly higher given a robust labor market, better tariff deals negotiated and more fiscal spending for defense infrastructure. Germany in particular has ambitious plans.

Amundi Investment Institute

We forecast global GDP growth at 3% in 2026 and 3.1% in 2027 (from 3.3% in 2025), with DM at 1.4% and 1.6% on average, and EM at 4% and 4.1%.

Amundi Investment Institute

EM growth will likely stabilize but keep outpacing that of developed economies. Cautious monetary easing should continue, with no signs of fiscal dominance. Asia will remain the primary growth engine, despite moderating growth in China (4.4% and 4.2%) and India (6.3% and 6.5%). In LatAm, a series of elections could usher in more business-friendly administrations.

Apollo Global Management

The One Big Beautiful Bill will likely be supportive of overall US growth, both in the near and long term.

Apollo Global Management

As the AI story continues to unfold, expect continued foreign investment in US assets — which can provide another tailwind for growth in the year ahead.

Capital Economics

AI adoption and associated investments have been slower to take hold outside the US, and there is little sign of this gap closing soon. This is one reason why we expect Europe to continue to underperform. Our GDP forecasts for both the UK and the euro zone sit below consensus, at 1.2% and 1.0% respectively. Chinese economic growth is likely to remain weaker than most anticipate. Our China Activity Proxy suggests the economy is currently growing by around 3% y/y – we expect a similar pace of expansion in 2026.

Carmignac

In China, the 15th five-year plan doubles down on the war economy. New fiscal stimulus is vital to floor growth at 4%. Authorities can still afford to monetize the deficit without endangering the renminbi thanks to a gargantuan trade surplus.

Comerica Wealth Management

Global GDP growth is projected to hover around 3%, reflecting a steady pace that balances optimism with caution. The US is recovering from previous tariff-induced shocks, bolstered by ongoing consumer spending and significant infrastructure investments. Meanwhile, Asia remains the primary engine of growth, with India, Korea, and Southeast Asia leading the advance. China's economy is stabilizing, showing moderate growth rates between 4% and 5%, while Japan experiences modest gains driven by technological innovation, export demand, and stimulative policies.

Deutsche Bank

Global economy set for robust growth overall in 2026. US growth still ahead of Europe’s. Outlook for China subdued.

Deutsche Bank

We also anticipate that policy will deliver a cyclical impulse in Europe, for example due to Germany’s EUR500bn special fund. Planned investments, particularly in infrastructure and climate neutrality, could trigger a short-term upswing.

DWS

Japan benefits from reforms, and the rest of Asia from strong chip demand, a weak dollar, and growing intra-regional trade.

Invesco

Businesses have demonstrated a strong ability to absorb economic shocks. We expect this resilience to be further bolstered by interest rate cuts in the US and fiscal support, such as government spending, across Europe, Japan, and China. We believe these measures should help lift the global economy out of its slowdown.

Invesco

Pessimism toward the UK is too high in our view. We believe the Bank of England now has more scope to cut rates, and retail sales appear to be on an uptrend. Economic growth could surprise positively in 2026 and support UK markets.

Invesco

We expect European growth to be supported across the region by higher military spending in many countries, continued growth in purchasing power, and recent interest rate cuts.

Invesco

We expect Japanese growth will continue to improve and move above trend in 2026, helped by meaningful fiscal stimulus. We expect the Bank of Japan to hike rates slowly, keeping rates well in accommodative territory, which should help support growth and investment.

Invesco

India should see ongoing reforms and potential in 2026 alongside an improvement in US-India relations. That can help lift Indian stocks higher. We expect India to remain the world’s fastest-growing large economy, with growth modestly accelerating on Reserve Bank of India rate cuts.

JPMorgan Asset Management

Activity should also meaningfully accelerate in continental Europe in 2026. The enormous fiscal stimulus announced in Germany in 2025 will start to feed through into economic data.

JPMorgan Asset Management

Further tax rises will likely weigh on near-term UK growth. However, slow activity may finally start to bring down inflation, which would at least allow the Bank of England to ease its foot off the brake.

Lazard Asset Management

Low interest rates and energy prices, rising real wages, and continued fiscal expansion support European growth in 2026. Risks include uncertainty around defense spending, political fragility, and countries’ willingness to implement economic reforms.

Lombard Odier

The outlook in emerging economies has improved, with fewer structural imbalances, strengthened foreign reserves, institutions and corporates.

Robeco

The second half of 2026 might see more promising signs of higher domestic consumption in China as the Chinese housing market deleveraging cycle reaches its final phase against a backdrop of stronger domestic fiscal stimulus.

Russell Investments

We believe solid economic fundamentals should support strong earnings fundamentals and protect against a layoff cycle. While weak hiring trends are a key risk to this view, we estimate 85% of the recent decline in job growth comes from immigration restrictions and curtailed government employment.

Schroders

For 2026, we see a low risk of recession, contained bond yields and momentum in company earnings which leads us to stay positive.

State Street

The US, and global, economies are set to enjoy continued growth in the coming year, albeit growth that is accompanied by a continuing sense of anxiety.

T. Rowe Price

Look for the US economy to shake off its growth scare from the second half of 2025 and outperform expectations in 2026 as AI spending and fiscal expansion provide support. Europe could lag consensus estimates because the front‑loading of tariffs in 2025 has drained meaningful manufacturing demand. In emerging markets, inflation and debt levels are reasonably under control, but tariffs are a wild card whose effects may take years to play out.

Vanguard

Our forecast for China’s economic growth in 2026 is also above consensus expectations. Despite ongoing external and structural challenges, real GDP growth is more likely to register 5% than 4%.

ABN AMRO

We see the US continuing to grow at a solid, trend-like pace over the next two years. But this will mask an increasing divergence between those benefitting from the AI boom, and a Main Street that is feeling the inflationary pinch from tariffs and the immigration crackdown.

ABN AMRO

Euro zone growth is expected to gradually accelerate towards trend in the course of 2026. There will be a slow-burning drag from US tariffs next year, but this will increasingly be offset by stronger domestic demand – helped by the ECB’s rate cuts – as well as Germany’s fiscal bazooka.

Barclays Private Bank

In the UK where pockets of attractive investment opportunities lie under a cloud of domestic uncertainty. The "doom and gloom" scenario that is playing on the minds of households and businesses might not materialize, and as the government navigates through building fiscal credibility while managing global tensions, sentiment should improve, allowing the economy to continue its slow and steady revival.

BCA Research

The coming year will clarify whether weakening US labor demand tips the economy into recession, and whether the AI boom will continue to boost economic growth and corporate earnings. A “K-shaped” economy in the US may be a temporary equilibrium, but we doubt that it can persist for long.

BCA Research

AI-related CAPEX will probably accelerate in 2026 even if total spending does not meet hyperscaler projections. In isolation, nonresidential fixed investment will provide a tailwind to growth next year.

BCA Research

China will not contribute to a significant pickup in global economic activity next year, at least not before the economy first decelerates further. The US consumer remains the most important driver for the global economy in 2026.

BNP Paribas Asset Management

In emerging markets, nations with strong tech sectors stand to benefit from lower US yields and dollar weakness, though export-oriented economies may face headwinds.

Future Standard

The US economy is on a straightaway full of potholes. AI capital spending and wealthy consumers have kept growth resilient despite a softening labor market. The path toward a healthy economy in 2026 is clear — the Fed is easing, fiscal policy will become more accommodative, and corporate earnings are strong — but risks from policy, housing, and labor remain.

Janus Henderson

We believe that expectations for AI and European growth are well founded. Each of these themes, in our view, represents the type of sea change that can propel economic growth to a higher trajectory, expand corporate margins, and compound earnings over an extended period.

JPMorgan Chase & Co.

Looking at the economy, We forecast a 35% probability of a US and global recession in 2026, and sticky inflation will likely remain a prevailing theme.

LGIM

We see the UK as being relatively more vulnerable to weaker-than-expected growth, given tightening fiscal policy. However, this could trigger more interest rate cuts than the two priced by the Bank of England over the next year from 4% in November.

NatWest

Governments continue to stimulate their economies. In the US, the "Big Beautiful Bill" includes tax cuts that should boost growth next year, while Germany has shifted from decades of fiscal restraint to a new era of significant borrowing and investment.

BNP Paribas Asset Management

In Europe, the economy looks set to regather momentum, whereas in the US, genuine uncertainty persists about how the Federal Reserve will navigate the economic currents and political backdrop. China’s focus will be on medium-term gains while realigning its investment-driven growth strategy.

Janus Henderson

At a regional level and away from the US, Europe is an example of where policy shifts, defense spending, and attempts to boost competitiveness are offering new investment opportunities.

Principal Asset Management

Globally, China is leaning into tech-driven growth, while Europe benefits from fiscal easing and low tech exposure.

Capital Economics

In the US, a combination of a resilient economy and an inflation rate that we expect to hover around 3% on the Fed’s preferred core PCE measure suggest that rate cuts will come more slowly than investors anticipate. The fed funds rate in a 3.25-3.5% range, compared with market expectations of a fall below 3% next year.

Capital Economics

In the euro zone, a combination of weak growth and soft inflation should allow the ECB to cut its deposit rate to about 1.5% next year, compared to market expectations of nearer 2%.

Capital Economics

In the UK, we expect inflation to fall faster than both the Bank of England and markets anticipate. Coupled with planned fiscal tightening, this should push the Bank to lower interest rates to 3% by year-end – below the level of 3.5% that is currently priced into markets.

Robeco

We expect to see overall US real GDP growth for 2026 at 2.1%. Our recession monitor flags a 20% US recession risk. Our base case is for the US CPI to show a random walk around 3%, with euro-zone inflation almost 100 basis points lower.

Vanguard

Our risk assessment for the euro area is more consensus-like given the lack of strong AI dynamics. We anticipate growth to hover near 1% in 2026, as the drag from higher US tariffs is offset by increased defense and infrastructure spending. Inflation should stay close to the 2% target, allowing the European Central Bank to maintain its current policy stance throughout the year.

Apollo Global Management

US growth will likely soften over the next few quarters as tariffs continue to be implemented, while inflation remains above target at 3%, keeping interest rates higher for longer. This slowdown will most likely be followed by an AI-fueled recovery. Put another way, we are not in for a recession.

BNY

With US inflation projected to be just modestly above target, the Fed will likely emphasize supporting employment and growth, though upcoming board changes could affect the size and speed of rate cuts. The Fed will likely keep cutting rates next year until the economy and financial markets stop it, bringing the lower bound of the range to 2.5% by 2027.

Capital Group

Europe real GDP growth at 1.4%. Growth and inflation could be slightly higher than last year. ECB to hike, BOE to cut. No end to fiscal woes in UK and France.

Comerica Wealth Management

The US Consumer Price Index is sticky and expected to run higher than the Federal Reserve’s 2% target, while the euro zone’s Harmonized Index of Consumer Prices should hover around 2%. In emerging markets, inflation remains a concern in select economies due to currency volatility and elevated food prices, but overall global inflation is expected to moderate.

First Abu Dhabi Bank

Although we expect inflation to continue to decline globally over the coming year, price pressures will differ dramatically by geography; inflation seems set to remain sticky and above target in the US as well as in Japan – with risks tilted even further to the upside – but likely more subdued elsewhere.

Goldman Sachs

Disinflation back on track: Inflation set to fall back to target levels by end 2026, as tariffs fade and medium-term forces (AI, China supply) come into view.

Lazard Asset Management

Elevated tariffs may lift US inflation through the first half of 2026 while tighter immigration enforcement reduces labor supply and GDP growth. AI investment is surging, but rising debt-funded spending with no clear path to profitability should raise yellow flags.

Lombard Odier

We expect below-trend and below-potential US growth in 2026. Business investment should remain strong, particularly in AI, as should government spending. The Fed’s interest rate cuts from restrictive levels should boost manufacturing activity and could finally see a struggling housing market bottom out. Yet higher unemployment and above-target inflation should weigh progressively on real incomes, weakening consumer spending, the principal driver of growth.

LPL Financial

A cooling US labor market and softer consumer demand will help ease inflation, though price pressures are expected to linger. Core PCE inflation will slowly decelerate to 2.5% by the end of the year. We anticipate the Fed will proceed with rate cuts gradually in 2026, balancing inflation concerns with a softening labor market. Cuts of 75 to 100 basis points.

Morgan Stanley

Companies and economies are likely to benefit from AI-related productivity gains, while global disinflation and growth should converge toward a sustainable pace in 2027 — with potential for further upside.

Pictet Asset Management

The US economy will lag many of its peers. There, we expect growth to slightly undershoot potential while inflation remains awkwardly high for the first few months of next year, before easing in the second half. Our economists forecast US GDP growth to dip to 1.5% in 2026 from 1.8% in 2025, while they see inflation rising to 3.3% from 2.9%. Given the US’s importance in the global markets, this could act as a brake on equity markets.

Vanguard

Economic growth is expected to keep US inflation somewhat persistent, remaining above 2% by the close of 2026. This combination of solid growth and still-sticky inflation suggests that the Federal Reserve will have limited scope to cut rates below our estimated neutral rate of 3.5%. Our Fed forecast is a bit more hawkish than the bond market’s expectations.

ABN AMRO

Euro zone inflation below the 2% target over the coming year. The undershoot could however prove fleeting, as later in the horizon we expect German fiscal spending to start providing some modest inflationary impulse.

Amundi Investment Institute

A positive stance on European bonds remains a key call for 2026, with a focus on peripheral bonds and short maturities, UK Gilts and investment grade credit, particularly in financials. Sticky inflation calls for seeking opportunities in inflation break-evens.

Bel Air Investment Advisors

Our inflation outlook calls for a moderate decline driven by restrained money supply and cooling home prices and rents. In addition, analysts are calling for a potential glut in oil prices, which would further support a lower inflation environment.

BNP Paribas

Global inflation is set to slow further but not by enough to remove the risks of persistent above-target dynamics.

BNP Paribas Asset Management

We expect European inflation to fall below target in 2027, which will prompt the ECB to deliver a couple more interest rate cuts by the end of 2026 – more than is currently factored into market pricing.

Capital Group

Inflation likely to remain above Fed's target at 3% to 3.3%, but could drift down if one-off price increases from tariffs wane or economic activity weakens.

Charles Schwab

There are some upside risks to US inflation, which we think will remain sticky and closer to 3% vs. 2%. While the labor market is not yet showing signs of recession-level weakness, affordability pressures continue to mount and labor supply will likely stay under pressure, contributing to monetary policy instability.

Fidelity International

Inflation in the US will probably be higher than the market expects in 2026, and this presents opportunities. Credit will prove more popular than sovereign bonds as investors weigh the risks of high government debt.

iCapital Research

Services inflation firming and tariff pass-through risks could keep core PCE above 3%. We do expect inflation to trend back towards the Fed’s target, albeit more slowly than initially expected.

JPMorgan Chase & Co.

Upward pressure on global goods prices related to the trade war is likely to be transitory, but we expect elevated goods price pressures to remain in place, at least through the first half of 2026.

JPMorgan Wealth Management

While we believe inflation will be higher and more volatile than it has been in recent years, we do not expect a reprise of 2022-style price hikes, and we have a broadly positive outlook for much of the fixed-income complex.

Ned Davis Research

We expect global inflation to continue to ease in 2026. Due to tariffs and immigration policies, US inflation is likely to stay above the Fed’s target in 2026.

Principal Asset Management

Inflation is expected to stay above target, but the Fed will likely tolerate moderate overshoots while lowering rates.

Societe Generale

In the lead-up to the November mid-term elections, the White House is likely to focus on mitigating tariff-induced inflation. We can expect more loosening of some trade deals, and decisive action to cap key food prices, followed by support for a new chair of the Federal Reserve from May with a more dovish approach beyond the end of quantitative tightening.

ABN AMRO

The main worry on the inflation front remains the US, where continued upward pressure is likely to come from tariffs, the immigration crackdown and – in our view – monetary policy that will end up being too loose for such a supply-constrained economy. A helpful offset is the unfolding massive supply glut of oil.

Apollo Global Management

Current pricing implies a 30% recession probability for the US in 2026. In a slowdown, non-AI-related equities (the S&P 493) face meaningful earnings risk. The combination of weakening growth and persistent inflation increases the likelihood of further market turbulence, requiring investors to be cautious as they position portfolios in 2026.

Apollo Global Management

The consensus expects US inflation to remain elevated because of ongoing tariffs. Europe faces none of these trade frictions and therefore will likely see inflation and interest rates fall in 2026. This divergence is unusual and increasingly relevant for global asset allocations.

BCA Research

Global inflation will likely continue to shift lower in 2026, and a hawkish monetary policy surprise is not in the cards.

BlackRock Investment Institute

This “no hiring, no firing” stasis gives the Federal Reserve room to keep trimming policy rates in 2026. Yet inflation could prove sticky above the Fed’s 2% target. We see a favorable policy and regulatory backdrop heading into the US midterm elections.

Columbia Threadneedle

While some economists argue that tariffs are a one-off price adjustment, it is possible they are more likely to feed through to sustained inflationary pressure in 2026.

JPMorgan Asset Management

We have been worried about inflation proving problematic, and remain so over the medium term. At present, however, a sufficiently subdued labor market and moderating pay requests are providing central banks comfort that any further uptick in headline inflation will not become embedded

JPMorgan Chase & Co.

Looking at the economy, We forecast a 35% probability of a US and global recession in 2026, and sticky inflation will likely remain a prevailing theme.

Northern Trust Asset Management

While we expect inflation to remain contained at its above-average rate of about 3%, investors must closely monitor the tail risks of inflation reigniting. The Federal Reserve’s balancing act between fighting inflation and supporting the labor market risks inflation levels staying above target. Tariffs and tighter immigration policies may put pressure on prices through goods and wages.

BlackRock Investment Institute

AI will likely keep trumping tariffs and traditional macro drivers as it has in 2025. In a world where US trend growth stays under 2%, absorbing that capex will require big macro adjustments – crowding out other non-AI spending in the economy, and potentially resulting in much higher inflation.

BNP Paribas Asset Management

An increase in tariffs, a looser fiscal stance and tighter immigration policy are all likely to add to inflationary pressure in the US economy, even if the net impact on activity is less clear-cut.

JPMorgan Asset Management

The risk for 2026 is that as activity gains momentum, workers start to feel more confident asking for higher pay and inflation does become a bigger issue. We are mindful that economists generally have a poor track record of forecasting inflation spikes.

JPMorgan Chase & Co.

Risks to this outlook include worryingly high inflation in the US, which would cause the Fed to stay on hold.

Capital Economics

In the US, a combination of a resilient economy and an inflation rate that we expect to hover around 3% on the Fed’s preferred core PCE measure suggest that rate cuts will come more slowly than investors anticipate. The fed funds rate in a 3.25-3.5% range, compared with market expectations of a fall below 3% next year.

Capital Economics

In the euro zone, a combination of weak growth and soft inflation should allow the ECB to cut its deposit rate to about 1.5% next year, compared to market expectations of nearer 2%.

Capital Economics

In the UK, we expect inflation to fall faster than both the Bank of England and markets anticipate. Coupled with planned fiscal tightening, this should push the Bank to lower interest rates to 3% by year-end – below the level of 3.5% that is currently priced into markets.

Capital Economics

A combination of a tight labor market and additional fiscal support means the Bank of Japan is likely to raise rates again next year. We expect the policy rate to reach 1.25%.

Truist Wealth

We expect an uptick in the pace of the US economy to 2.3%, supported by relief from tax changes, Fed rate cuts towards 3%, greater stability on tariffs, and ongoing AI- and tech-driven capital spending. Collectively, these factors should help extend the cycle.

UniCredit

The US economy remains solid, with growth projected at 2.1%, driven by fiscal support and AI investment. Inflation will stay above target at 2.9%, while the Fed is expected to deliver two rate cuts by year-end, bringing rates to 3.5%.

UniCredit

In China, growth slows to 4.1%, reflecting structural headwinds from real estate stress and weak domestic demand. The PBOC is likely to ease further to support activity.

UniCredit

Japan posts modest growth (0.8%) amid gradual BOJ tightening, while the UK remains stuck in low gear (1%) as fiscal tightening and weak productivity weigh on prospects.

Vanguard

Our risk assessment for the euro area is more consensus-like given the lack of strong AI dynamics. We anticipate growth to hover near 1% in 2026, as the drag from higher US tariffs is offset by increased defense and infrastructure spending. Inflation should stay close to the 2% target, allowing the European Central Bank to maintain its current policy stance throughout the year.

Allspring Global Investments

China should provide more fiscal and monetary stimulus to support cautious consumers and cushion the negative impact of slowing exports to the US.

Allspring Global Investments

While US inflation should stabilize in 2026, the path to the Federal Reserve’s 2% target will be longer than expected. Loose fiscal policy will likely be partly offset by government job cuts and the Fed’s step-by-step approach for moving rates lower. We believe it will take further weakening in service prices and wages to bring inflation closer to the Fed target.

Amundi Investment Institute

We anticipate the ECB will ease beyond current market expectations, to 1.5% by mid-2026, and the BOE will bring down rates to 3.25%.

Bank of America

Treasury yields could surprise to the downside in 2026. We expect the 10-year to end 2026 at 4-4.25% with risks to the downside. Our US economists expect the Fed to cut rates by 25 basis points at the December 2025 meeting and twice in 2026 (June and July).

Bel Air Investment Advisors

Following the December rate cut, the Fed is likely to cut an additional 25–50 basis points in 2026, as stagnation in the job market outweighs inflation concerns.

BNY

With US inflation projected to be just modestly above target, the Fed will likely emphasize supporting employment and growth, though upcoming board changes could affect the size and speed of rate cuts. The Fed will likely keep cutting rates next year until the economy and financial markets stop it, bringing the lower bound of the range to 2.5% by 2027.

BNY

The ECB may ease slightly, while the Bank of England and Bank of Japan are likely to implement firmer policy rates, with the latter negotiating a complicated government transition that leaves it open to domestic political pressure.

Capital Economics

2026 will be a year in which most central banks will continue to loosen monetary policy, but the pace of easing will vary widely and in several cases our forecasts diverge meaningfully from expectations currently priced into markets.

Capital Group

Europe real GDP growth at 1.4%. Growth and inflation could be slightly higher than last year. ECB to hike, BOE to cut. No end to fiscal woes in UK and France.

Capital Group

Fed at 3%. Dovish central bank is likely to continue with rate cuts, responding to labor market weakness.

Carmignac

In the US, expect Trump to turbocharge policy stimulus ahead of the midterms through fiscal and monetary levers and the deregulation of banks.

Federated Hermes

The Fed is in a new cutting cycle. With rates at 4.25% against a core inflation rate of 2.5%, the US Federal Reserve has a long way to go in this easing cycle. Although the broad economy is not as rate-sensitive as it once was, certain sectors are – and they have been in a two-year recession. Relief here will be a rocket booster to overall growth.

First Abu Dhabi Bank

In the euro zone the outlook remains fragile and real GDP growth will likely fail to exceed 1% over the coming year. We anticipate euro area real GDP growth of 0.9% for 2026. Under such conditions, the ECB (and the Bank of England likewise in the UK) will not want to ease rates too far and risk over-stimulating a fragile economy.

First Abu Dhabi Bank

Our macro outlook for the UK economy in 2026 continues to be one of tepid economic activity, characterized by sluggish growth and sticky, above-target inflation. From the current Bank of England Bank Rate of 4%, we forecast that the neutral rate should be close to 3% and that the Bank should ease policy to that level by the end of the first half. We forecast UK real GDP growth to be an anemic 1.2% in 2026, down from 1.4% in 2025, before perhaps picking up just slightly, back to around 1.4% in 2027.

Goldman Sachs

We expect the Fed to cut by 50 basis points to 3-3.25% and see dovish risks due to our conviction on disinflation, labor market concerns, and the upcoming change in Fed leadership.

Goldman Sachs

We also expect cuts in the UK (75 basis points) and many EMs, especially Brazil and CEEMEA. We see the euro area as firmly on hold and disagree with the extent of the shift in market pricing toward hikes in Canada and Australia.

Goldman Sachs Asset Management

The ECB may hold for the foreseeable future while the BOE could resume cuts, driven by improved inflation, a relatively weak labor market, and potential tax hikes. Japan, with its high inflation and robust growth, will likely prompt the BOJ to hike rates. This outlook is reinforced by recent political changes and a shift towards looser fiscal policy.

HSBC

Against a backdrop of still-sticky inflation and resilient economic activity, the Fed may cut less than markets expect, limiting further downside in US Treasury yields. Therefore, we’ve reduced our preferred duration for exposure to five-to-seven years to reflect the risk of increasing volatility in longer-dated bonds.

JPMorgan Chase & Co.

The Fed is expected to cut rates by another 50 basis points, while the Bank of Japan is expected to hike by the same amount. Elsewhere, most DM central banks will likely either stay on hold or conclude their easing cycle in the first half of the year.

JPMorgan Chase & Co.

Lower macro volatility looks set to support EM local markets in 2026. Overall growth (excluding China) is forecast to maintain a trend-like pace of 3.3%, helped by factors including fading tail-risks on tariffs, easier monetary policy and ongoing tech capex. We continue to see further EM rate cuts in the pipeline, but the pace and breadth of cuts are expected to moderate in 2026.

Lombard Odier

Monetary policy will provide support, with interest rates falling in the US and UK, and euro-zone and Swiss rates on hold at neutral levels.

Lombard Odier

The outlook in Europe is stabilizing. We expect the euro-zone economy to expand around its potential rate of 1% in 2026, with interest rates on hold and inflation remaining roughly in line with target over the year.

Lombard Odier

Only the UK market is likely to offer some better relative performance, as the Bank of England will need to ease policy more than in other developed economies, improving return prospects for UK debt.

LPL Financial

A cooling US labor market and softer consumer demand will help ease inflation, though price pressures are expected to linger. Core PCE inflation will slowly decelerate to 2.5% by the end of the year. We anticipate the Fed will proceed with rate cuts gradually in 2026, balancing inflation concerns with a softening labor market. Cuts of 75 to 100 basis points.

Morgan Stanley

Government bonds — particularly in the US — are likely to rally in the first half of the year as central banks shift from inflation control to policy normalization but decline in the second half.

Pictet Asset Management

We expect the US Federal Reserve to deliver fewer interest rate cuts than markets expect, notwithstanding Trump’s efforts to undermine its independence. Our economists expect just one further cut in the Fed funds rate to 3.75% by the end of 2026. That could set up some disappointment in the bond market.

Robeco

While the ECB judges itself to be “in a good place” at the moment, we expect one more rate cut (25 basis points) in 2026 even as the European recovery strengthens on the back of fiscal stimulus. We think that the market is underpricing the risk of additional rate hikes by the Bank of Japan in 2026.

Robeco

For central banks in emerging markets, we think they will largely mimic the easing stance we foresee for the Fed into 2026 as stronger currencies allow further rate cutting toward underlying neutral policy rates. For the People’s Bank of China, our view of decelerating disinflation and a weaker yuan reduce urgency for aggressive cuts.

Vanguard

Economic growth is expected to keep US inflation somewhat persistent, remaining above 2% by the close of 2026. This combination of solid growth and still-sticky inflation suggests that the Federal Reserve will have limited scope to cut rates below our estimated neutral rate of 3.5%. Our Fed forecast is a bit more hawkish than the bond market’s expectations.

Wells Fargo Investment Institute

Despite conflicting signals from slow job growth but a strengthening economy, we see the Fed maintaining a downward rate trend, with steepening yield spreads between short- and long-term rates offering investment opportunities.

ABN AMRO

We expect labour markets to dominate the Fed’s thinking, and the more dovish tilt of the Fed in 2026-7 leads us to expect a string of rate cuts over the next year, taking the fed funds rate down to the lower end of neutral estimates (3% in the upper bound) by September.

ABN AMRO

The ECB is in a comfortable position, and is expected to keep policy on hold over 2026-7 amid broadly balanced growth and inflation dynamics. In the near term, the risk is still tilted somewhat to another cut if anything, given the expected inflation undershoot, and the upside risks to the euro exchange rate.

Allspring Global Investments

Euro-zone inflation is expected to drop further below 2% and the region’s consumers are likely to keep their saving rate high and spending muted. The ECB might have opportunities for more rate cuts if growth doesn’t recover.

Allspring Global Investments

China and Japan will likely remain outliers: Japan will aim to carefully normalize monetary policy, while in China, more fiscal and monetary stimulus is expected.

Amundi Investment Institute

We expect the Fed to cut twice in the first half of 2026, to 3.25% and the dollar to weaken, but the journey will not be linear.

BNP Paribas

Most central banks’ bias will remain for further easing, with the notable exception of Japan.

BNP Paribas Asset Management

We expect European inflation to fall below target in 2027, which will prompt the ECB to deliver a couple more interest rate cuts by the end of 2026 – more than is currently factored into market pricing.

BNY

EM assets appear ready for a notable role in 2026, particularly with many EM central banks poised to ease, China likely to stimulate growth, and US dollar pressure continuing.

Charles Schwab

There are some upside risks to US inflation, which we think will remain sticky and closer to 3% vs. 2%. While the labor market is not yet showing signs of recession-level weakness, affordability pressures continue to mount and labor supply will likely stay under pressure, contributing to monetary policy instability.

Global X

We still believe that the Fed could deliver two 25-basis point cuts by March 2026, while consensus expectations slipped to June.

Goldman Sachs Asset Management

Goldman Sachs Asset Management sees potential for two Fed cuts in 2026.

iCapital Research

Hawk vs. dove debate will undoubtedly persist into 2026, with the Fed likely to pause rate cuts, similar to 2025. Rate cuts seem like they will be back-half loaded as we will likely get a more dovish-leaning Fed Chair in May.

Invesco

Pessimism toward the UK is too high in our view. We believe the Bank of England now has more scope to cut rates, and retail sales appear to be on an uptrend. Economic growth could surprise positively in 2026 and support UK markets.

Invesco

We expect European growth to be supported across the region by higher military spending in many countries, continued growth in purchasing power, and recent interest rate cuts.

Invesco

India should see ongoing reforms and potential in 2026 alongside an improvement in US-India relations. That can help lift Indian stocks higher. We expect India to remain the world’s fastest-growing large economy, with growth modestly accelerating on Reserve Bank of India rate cuts.

JPMorgan Asset Management

Under intense political pressure, the Fed now seems likely to bring interest rates back to "neutral" – a level which it believes to be around 3%.

JPMorgan Asset Management

Further tax rises will likely weigh on near-term UK growth. However, slow activity may finally start to bring down inflation, which would at least allow the Bank of England to ease its foot off the brake.

Lazard Asset Management

Divergent central bank policies could meaningfully increase volatility as the BOJ tightens policy while other developed market central banks ease. While short rates fall, large sustained fiscal deficits are likely to put upward pressure on long-term yields, leading to further steepening of developed market yield curves.

Lazard Asset Management

Japanese Prime Minister Sanae Takaichi will pursue an expansionary fiscal and regulatory agenda reminiscent of Abenomics. But the Bank of Japan’s inclination to tighten monetary policy given domestic inflationary pressures will pose a new tension.

Nuveen

On monetary policy, we see little scope for excitement. We expect the Federal Reserve and Bank of England to continue cutting rates, but likely by less than markets currently price. Meanwhile, we expect the European Central Bank and Bank of Japan to hike rates by the end of 2026. Neither dynamic – market pricing disappointment or outright rate hikes – is likely to support duration.

Principal Asset Management

The Fed is likely to pursue only a modest easing cycle, navigating structural inflationary forces. Even modest Fed easing may offer outsized market support, particularly as many investors overprice rate cut expectations.

Robeco

As the Fed considers itself still to be “modestly restrictive” at the current juncture, we expect more Fed cuts (75 basis points toward the end of 2026). However, as we remain in a sticky inflation environment with medium-term inflation risks increasingly skewed to the upside as 2026 progresses, we expect the Fed funds rate to end above the current consensus 3% estimate by the end of 2026.

Russell Investments

If our outlook for the economy proves correct, the Federal Reserve may slow down or halt its easing cycle into early 2026.

Societe Generale

In the lead-up to the November mid-term elections, the White House is likely to focus on mitigating tariff-induced inflation. We can expect more loosening of some trade deals, and decisive action to cap key food prices, followed by support for a new chair of the Federal Reserve from May with a more dovish approach beyond the end of quantitative tightening.

Societe Generale

Despite the recent drop in the federal funds rate from 5.5% to 4%, the real fed funds rates remain elevated. This indicates that monetary conditions are still relatively restrictive when adjusted for inflation. Our economists anticipate additional cuts by April next year, broadly in line with current market expectations.

Societe Generale

In the UK, tighter fiscal policy is set to limit growth, allowing the Bank of England to ease its restrictive monetary policy. This should improve competitiveness through a weaker pound (we maintain zero exposure to the currency) and offer more support to UK large-cap equities, which we have increased by 1pp to 4%.

T. Rowe Price

The Fed will have difficulty returning inflation to its 2% target. Expectations for rate cuts in 2026 seem to overestimate the amount that the central bank will ease, and it may not be able to lower rates next year at all.

T. Rowe Price

Euro zone manufacturing may be weaker than expected in 2026. This could surprise the ECB, shifting its policy stance more dovish. Political pressure in the UK is likely to drive some fiscal consolidation, albeit from levels that are quite expansionary. In response, the Bank of England should be able to ease rates more than is currently priced in.

T. Rowe Price

With Japan’s new government, more fiscal stimulus is likely, adding fuel to inflation and leading the BOJ to eventually hike policy rates by more than expected. The People’s Bank of China seems reluctant to ease, preferring to use quantity‑based tools to allocate credit to favored sectors, although one rate cut in early 2026 is not out of the question.

Tallbacken Capital

We don’t know who will be the Fed Chairman, nor how dovish a post-Powell Fed will be. However, we think it’s a reasonable assumption that an unusually high level of dissent among Fed officials will be a defining feature of next year’s Fed. Dissent will ultimately help moderate any excessively dovish impulses a new Chairman might have and also help homogenize expected Fed policy rates (this will help reduce rate volatility).

ABN AMRO

Our base case sees the Fed broadly maintaining its independence; that is, we do not expect the Committee to be replaced wholesale with Trump appointees. But Trump will still wield considerable influence.

Barclays Private Bank

Markets anticipate the ECB to stay put in 2026 (and beyond). This is overly optimistic in our view. One could easily construct a scenario in which the ECB finds itself hiking interest rates next year. That said, we see the likelihood of an interest rate cut as much more prevalent.

BCA Research

Monetary easing may eventually stabilize US aggregate demand, but we doubt that a few extra cuts are likely to meaningfully support consumer spending in 2026.

BCA Research

Global inflation will likely continue to shift lower in 2026, and a hawkish monetary policy surprise is not in the cards.

BlackRock Investment Institute

This “no hiring, no firing” stasis gives the Federal Reserve room to keep trimming policy rates in 2026. Yet inflation could prove sticky above the Fed’s 2% target. We see a favorable policy and regulatory backdrop heading into the US midterm elections.

BNP Paribas Asset Management

Going forward, we expect the Fed to place more weight on outcomes in the labor market and correspondingly less weight on inflation data. In our view, this shift will lead the Fed to cut a little further over the next couple of years than the market currently expects.

BNY

Globally, shifting monetary policies across regions present opportunities for selective duration and country allocation, including opportunities to diversify rate exposure and generate quality income outside the US.

Citi

We see some central banks holding rates stable — but many others look poised to cut further. These easing cycles are generally taking rates back toward neutral, rather than into outright accommodative territory.

Columbia Threadneedle

We believe the risk of policy error – specifically, cutting rates too far too fast – is rising. Lowering short-term rates to ease financial strains could steepen yield curves sharply if bond investors lose confidence in inflation control, raising the five‑ to 10‑year funding cost and blunting any short‑rate relief.

First Abu Dhabi Bank

For now, the Fed’s path — and the ultimate “floor” for the fed funds rate — remains deeply uncertain although our core view remains that with US economic growth momentum fading and tariff-driven price pressures sticky to the upside, a net hawkish bias should increasingly characterize Fed thinking – and narrative – over the coming quarters. While we anticipate no more than 50 basis points of additional monetary easing by the Fed during 2026, ultimately, of course, the interest rate path for the year will depend heavily on how inflation evolves, how the labor market performs, and how both internal and external policy risks play out.

Future Standard

Fixed income faces risks on multiple fronts. The Fed has lowered short-term interest rates substantially over the past 15 months. Strong growth and the potential for delayed-onset tariff-driven inflation introduce risks to further easing, while a new Fed chair will inject uncertainty into the central bank’s communications and independence. Expect rate volatility and curve steepening.

Janus Henderson

US rate cuts and subdued inflation should broadly support fixed income, but scrutiny over policy motives will shape yield curve dynamics.

LGIM

We see the UK as being relatively more vulnerable to weaker-than-expected growth, given tightening fiscal policy. However, this could trigger more interest rate cuts than the two priced by the Bank of England over the next year from 4% in November.

Robeco

The next Fed president could prove to be more susceptible to the Trump agenda by adopting policy rates that end up below a Taylor rule-implied policy rate.

State Street

We are now more cautious about the pace of future rate reductions, and expect more divergence between central banks. For instance, the Fed should have room to deliver up to three cuts in 2026, the Bank of England has been a laggard in the easing journey, so some catch-up is expected in coming quarters, and we believe the European Central Bank will pause for the near term. The Bank of Japan may extend its approach of cautiously hiking rates

Columbia Threadneedle

A shift towards politically aligned Fed appointments may compromise its long-term focus on price stability. Investors should remain vigilant and consider the implications for inflation expectations and asset pricing.

Barclays Private Bank

For the time being, we pencil in a couple of US interest rate cuts in 2026 but acknowledge upside and downside risks.

UniCredit

The euro zone shows resilience, with GDP expected to rise 1%, aided by fiscal stimulus and NGEU investments. Germany's fiscal bazooka begins to fire, while France faces political uncertainty and Italy benefits from EU recovery funds. Inflation is set to hover near 1.8%, allowing the ECB to keep rates on hold at 2%.

Allspring Global Investments

China should provide more fiscal and monetary stimulus to support cautious consumers and cushion the negative impact of slowing exports to the US.

Allspring Global Investments

While US inflation should stabilize in 2026, the path to the Federal Reserve’s 2% target will be longer than expected. Loose fiscal policy will likely be partly offset by government job cuts and the Fed’s step-by-step approach for moving rates lower. We believe it will take further weakening in service prices and wages to bring inflation closer to the Fed target.

Bank of America

US GDP growth of 2.4% in 2026. The US Economics team’s above-consensus views are fueled by several factors: an expected boost by the One Big Beautiful Bill Act; increased business investment due to restoration of Tax Cuts and Jobs Act benefits; trade policy; fiscal stimulus; and the lagged effects from rate cuts by the Federal Reserve.

BNP Paribas

Our most pronounced non-consensus view is on the euro zone, where we expect fiscal stimulus to drive stronger growth than many other forecasters do.

Capital Group

US and European growth trajectories to converge as the US slows and EU benefits from fiscal tailwinds. China shows signs of stabilizing and Japan is on track for fiscal expansion. Real global growth of 2.3% to 2.5%.

Carmignac

In the US, expect Trump to turbocharge policy stimulus ahead of the midterms through fiscal and monetary levers and the deregulation of banks.

Goldman Sachs

Despite the longer-term challenges, our 2026 forecast for the euro area (1.3% vs. 1.1%) is reasonably upbeat owing to fiscal stimulus in Germany and strong growth in Spain.

JPMorgan Asset Management

In France, tough decisions – and fiscal consolidation – have now largely been postponed until the 2027 presidential election. France is, therefore, unlikely to derail the European recovery in 2026.

JPMorgan Chase & Co.

Activity momentum in the euro zone is likely to improve in 2026, thanks to better credit impulse and the rollout of fiscal stimulus. Earnings are expected to grow by 13%+ next year, supported by stronger operating leverage, reduced tariff headwinds, easier comps and better financing conditions.

Lazard Asset Management

China’s housing crisis will continue to exacerbate economic imbalances, with limited expected fiscal stimulus.

Allspring Global Investments

Outside the US, we expect growth to trend slightly higher given a robust labor market, better tariff deals negotiated and more fiscal spending for defense infrastructure. Germany in particular has ambitious plans.

Invesco

We expect Japanese growth will continue to improve and move above trend in 2026, helped by meaningful fiscal stimulus. We expect the Bank of Japan to hike rates slowly, keeping rates well in accommodative territory, which should help support growth and investment.

JPMorgan Asset Management

Activity should also meaningfully accelerate in continental Europe in 2026. The enormous fiscal stimulus announced in Germany in 2025 will start to feed through into economic data.

JPMorgan Chase & Co.

Our dollar view for 2026 is net bearish, albeit smaller in magnitude and less uniform in breadth than in 2025. We are moderately bullish on the euro — a view supported by euro-zone growth and German fiscal expansion.

Lazard Asset Management

Japanese Prime Minister Sanae Takaichi will pursue an expansionary fiscal and regulatory agenda reminiscent of Abenomics. But the Bank of Japan’s inclination to tighten monetary policy given domestic inflationary pressures will pose a new tension.

T. Rowe Price

With Japan’s new government, more fiscal stimulus is likely, adding fuel to inflation and leading the BOJ to eventually hike policy rates by more than expected. The People’s Bank of China seems reluctant to ease, preferring to use quantity‑based tools to allocate credit to favored sectors, although one rate cut in early 2026 is not out of the question.

Bank of America

A better understanding of the impact that AI has on growth, inflation and capex will likely cause market volatility. The K-shaped economic recovery and fiscal dominance are other sources of expected turbulence.

BNY

Companies beyond tech that can capture AI-supported competitive advantages seem well positioned. The intersection of “fiscal-plus-AI” could become a structural accelerator, supporting growth in infrastructure, energy and metals.

JPMorgan Chase & Co.

In the UK, there is potential for further bouts of increased term premia around fiscal events, with political uncertainty also increasing.

NatWest

Governments continue to stimulate their economies. In the US, the "Big Beautiful Bill" includes tax cuts that should boost growth next year, while Germany has shifted from decades of fiscal restraint to a new era of significant borrowing and investment.

Neuberger Berman

We expect the global fiscal bias towards spending to prevail, even as tariff uncertainties remain and deficits widen.

Principal Asset Management

The “One Big Beautiful Bill” offers near-term fiscal stimulus, though its lasting effects remain uncertain.

Barclays Private Bank

The president’s reciprocal tariffs − which are bringing in close to $300 billion in revenue each year − are likely to be deemed illegal by the US Supreme Court. Without this cornerstone, fiscal policy will need to adjust.

BNP Paribas Asset Management

An increase in tariffs, a looser fiscal stance and tighter immigration policy are all likely to add to inflationary pressure in the US economy, even if the net impact on activity is less clear-cut.

Capital Economics

Political shocks that cast doubt over a government’s commitment to fiscal discipline can provoke a sell-off in bond markets and a tightening in financial conditions, which in turn weighs on economic growth and adds to concerns over fiscal sustainability.

Macquarie

As interest costs rise and issuance increases, fiscal choices will directly influence bond markets, currency dynamics and risk sentiment, making fiscal trajectories as important as central bank policy for investors in 2026.

Schroders

We are watchful for signs that policy has become too stimulative, such as a re-tightening of the labor market or rising core inflation and wages. Fiscal policies in the US and elsewhere are also storing up trouble. The bond market could be a catalyst for a possible correction.

BNY

Evolving fiscal dynamics, divergent monetary policy and currency headwinds remain risks.

Capital Group

Capital Group economists are slightly less optimistic about the prospects for the global economy than the IMF, but they still expect to see solid growth in the US, Europe, Japan and most emerging markets. That’s primarily due to more clarity on US tariffs and trade policy.

Capital Group

US real GDP growth at 1.6% to 2.2%. Tariff and job market weakness could still create a drag in the first half. AI spending and favorable policies suggest the potential for upside surprises.

Lazard Asset Management

Elevated tariffs may lift US inflation through the first half of 2026 while tighter immigration enforcement reduces labor supply and GDP growth. AI investment is surging, but rising debt-funded spending with no clear path to profitability should raise yellow flags.

BCA Research

Markets overestimate the odds of the Supreme Court striking down US import tariffs. Tariff revenue is projected to increase in 2026, offsetting most of OBBBA’s stimulative provisions.

Capital Economics

Although it’s possible the Supreme Court could strike down parts of the Trump administration’s tariff regime, the growing dependence on tariff revenue suggests the authorities will find ways to keep barriers in place.

Citi

We doubt tariffs will at this stage deal a disruptive blow to global growth or inflation, and we judge recession risk as low.

Global X

US infrastructure valuations look compelling. The tariff s on steel, aluminum, and copper may support profitability of US-domiciled producers that sell most of their goods within the US market.

iCapital Research

Services inflation firming and tariff pass-through risks could keep core PCE above 3%. We do expect inflation to trend back towards the Fed’s target, albeit more slowly than initially expected.

iCapital Research

Supreme Court review of IEEPA tariffs could add uncertainty to fiscal outlook and rates. Given the administration will have other authorities to implement their tariff strategy, we don’t see massive upside to rates.

Lombard Odier

The impact of tariffs will be felt as strongly in 2026, slowing the global trade in goods, denting profits for businesses across the world, and raising costs for US consumers. Even if the Supreme Court rules against some of the current US tariffs, we would expect them to be quickly reimposed using different legal justifications. Policy uncertainty, fragile geopolitics and tense US-China relations also look set to persist.

Ned Davis Research

We expect global inflation to continue to ease in 2026. Due to tariffs and immigration policies, US inflation is likely to stay above the Fed’s target in 2026.

Wells Fargo Investment Institute

Increased defense spending and infrastructure rebuilding in European nations like Germany, coupled with less disruptive tariff impacts than we previously anticipated, support our preference for a full international equity allocation.

ABN AMRO

Could the imminent US Supreme Court ruling on the legality of Trump’s tariffs be a game changer for the outlook? We think not, as even if the Court rules the tariffs to be illegal, the President has a number of alternatives, especially given support from the Republican majorities in Congress.

Apollo Global Management

The consensus expects US inflation to remain elevated because of ongoing tariffs. Europe faces none of these trade frictions and therefore will likely see inflation and interest rates fall in 2026. This divergence is unusual and increasingly relevant for global asset allocations.

Columbia Threadneedle

While some economists argue that tariffs are a one-off price adjustment, it is possible they are more likely to feed through to sustained inflationary pressure in 2026.

Macquarie

We estimate a nine to 18 month lag from announcement to the impact of tariff increases, suggesting the biggest economic impact from this year’s tariff increases could materialize in the first half of 2026.

Neuberger Berman

We expect the global fiscal bias towards spending to prevail, even as tariff uncertainties remain and deficits widen.

Barclays Private Bank

The president’s reciprocal tariffs − which are bringing in close to $300 billion in revenue each year − are likely to be deemed illegal by the US Supreme Court. Without this cornerstone, fiscal policy will need to adjust.

BNP Paribas Asset Management

An increase in tariffs, a looser fiscal stance and tighter immigration policy are all likely to add to inflationary pressure in the US economy, even if the net impact on activity is less clear-cut.

Evercore ISI

The bull market will extend in 2026, underpinned by the ongoing AI revolution and reinforced by solid if unremarkable economic growth, and fiscal and monetary stimulus (OBBB, Fed cut cycle). Importantly, the signs that have historically ended bull markets – recession, “uncooperative” Fed, exuberant investor and capital markets sentiment – are absent. Base case is S&P 500 at 7,750 at yearend.

Evercore ISI

As we near 2026, Evercore ISI assigns a 30% probability to an AI-driven market bubble inflating, potentially driving the S&P 500 to 9,000 by year-end, amid rising FOMO and speculative echoes of past eras like Y2K. Yet, with AI adoption reaching its hottest, ample sidelined cash, restrained margin use, and leader gains and valuations paling against Dotcom peaks, a full bubble remains on the horizon. To capitalize, we roll our June 2026 upside calls to Dec. 2026 for limited-risk, high-reward exposure to explosive potential gains in the AI Revolution Class of 2025.

Federated Hermes

AI productivity gains should begin to accelerate. Across the world, companies of every stripe are incorporating the AI revolution into their work processes, likely unleashing a new era of productivity gains.

HSBC

We see opportunities widening across sectors in the AI ecosystem. Industrials and Utilities should benefit from the growing demand for digital infrastructure and electricity, while long-term structural initiatives continue to prioritize reshoring and re-industrialization to strengthen strategic autonomy in supply chains, especially in technology and defense.

HSBC

We’re not worried about an AI bubble, but do believe that short-term market dips should be expected.

JPMorgan Wealth Management

The AI boom is still gaining momentum. We believe this potent technology will disrupt labor markets and boost productivity globally while creating value across public and private markets. Yes, tech stocks keep driving market gains, but no, we do not see a bubble about to burst. Physical, social and political constraints on the AI expansion should act as a moderating influence. The biggest risk, to us, is not having exposure to this transformational technology.

Morgan Stanley

Companies and economies are likely to benefit from AI-related productivity gains, while global disinflation and growth should converge toward a sustainable pace in 2027 — with potential for further upside.

Neuberger Berman

Target AI thematically, employing diversification across regions and sectors to optimize returns rather than concentrating exposure. Seek out companies that are seeing tangible results and/or accruing measurable benefits. Consider AI-adjacent targets (e.g., power suppliers), focusing on companies or industries rapidly adopting AI or supporting its buildout, including financials, industrials and health care.

Robeco

So far expected earnings growth of the hyperscalers has remained in lockstep with growth in their capital expenditures. We do not see signs of overcapacity yet. Capex is still predominantly financed by cashflows rather than debt. We are not “partying like it’s 1999”. For now, the US tech sector exhibits a buzzing instead of a bursting bubble.

Russell Investments

We expect the benefits of AI to economy-wide productivity and profitability to ramp up in 2026. Importantly, the productivity cycle from new technologies often mimics a “J-curve” pattern of initial negative results followed by eventual long-term gains.

Russell Investments

The defining force for equity markets continues to be the AI buildout, but its impact is changing. The early infrastructure cycle — led by hyperscalers and semiconductor firms — is now expanding into broader corporate adoption. Companies that apply AI to boost productivity and margins are emerging as the next beneficiaries.

Schroders

We still see the potential for the hyperscalers to deliver revenues. We are monitoring the return on investment of these mega cap companies as they have evolved from free cash flow monsters to big spenders, and we are also watching the performance of large language model and cloud computing companies as a reflection of the adoption of the new technologies.

Societe Generale

Demand growth for AI continues to outpace supply growth. For now, we maintain exposure to hyperscalers, while we have found risks in free cash flow burners, particularly within private markets.

T. Rowe Price

While the AI sector’s expanding capex and reliance on debt will introduce new risks, we believe the long‑term growth prospects remain compelling — especially for the hardware suppliers and hyperscalers at the heart of the ecosystem. For investors, this means focusing not only on visionary technology, but also on execution, financial resilience, and clear paths to monetization as AI enters its next chapter.

Tallbacken Capital

While we expect neither boom nor bust next year, we do expect increasing divergence within the economy. As the economy becomes increasingly K-shaped, asset managers will have to recognize that the stock and credit markets will also become increasingly K-shaped: in a world increasingly defined by AI disruption and the re-engineering of global supply chains, scale matters.

UniCredit

In our view, there is no AI bubble, but this does not mean that there are no risks. But we need to look at them through the right lens. Comparisons with the dotcom bubble are misleading. The Mag 7 are not start-ups with exciting business ideas but no products to sell. They are mature, cash-rich and earnings-generating companies

Vanguard

The heady expectations of US technology stocks are unlikely to be met for at least two reasons. The first is the already-high earnings expectations and the second is the typical underestimation of creative destruction from new entrants into the sector which erodes aggregate profitability.

Vanguard

Our muted US stock return forecast of 4%–5% average returns over the next five-to-10 years is nearly single-handedly driven by our risk-return assessment of large-cap technology companies.

Wells Fargo Investment Institute

In 2026, we expect to see artificial intelligence develop further from a concentrated technology phenomenon into a broad-based economic growth catalyst. The technology, energy and infrastructure demands of digital assets, autonomous vehicle production, growing defense needs, and industrial automation more broadly should drive opportunities in the industrials and utilities equity sectors.

Amundi Investment Institute

In equities, we favor exposure beyond the AI-race into the broadening tech theme - including power energy, computing, materials needed to overcome physical constrains that are building - and a combination of defensive and cyclical themes.

Apollo Global Management

As the AI story continues to unfold, expect continued foreign investment in US assets — which can provide another tailwind for growth in the year ahead.

Bank of America

AI investment spend has already boosted GDP growth and our economists expect continued growth next year. Our analysis of past bubbles suggests the technology sector of the US stock market is still on solid ground.

BlackRock Investment Institute

We see the AI theme supported by strong earnings, resilient profit margins and healthy balance sheets at large listed tech companies. Continued Fed easing into 2026 and reduced policy uncertainty underpin our overweight to US equities.

Brandywine Global

We remain selective around AI. Revolutionary technologies can be life changing and bubble prone at the same time. Railway mania in the 1840s, the dot-com period, and today’s data center buildout all share the same pattern. Our focus is on the broader ecosystem of beneficiaries rather than the narrow group of headline winners.

Charles Schwab

We believe the market could reward AI adopters more than AI enablers, with adopters positioned to benefit by locking in measurable gains in efficiency and innovation.

Charles Schwab

We do believe there will continue to be cannibalization and leapfrogging in play across the AI sphere in 2026, including less of an obsessive focus on cohorts like the Magnificent Seven. Given that only two of its cohorts are outperforming the index so far in 2025, and our expectation of some market broadening, a monolithic approach increasingly does not make sense.

Citi

Despite concerns of a US equity market bubble driven by AI investment, strategic portfolio diversification into China's AI value chain, financials, and base metals is recommended for sustained performance.

DWS

The AI boom offers surprises both up and down, so we do not favor the tech-heavy US over other regions.

Global X

The AI ecosystem is likely to remain a compelling investment given the expected impact of automation across the economy. The most direct route is investing in the companies developing and delivering the AI software and hardware solutions.

Global X

Exposure to mega-cap tech is important, but other players are critical to the buildout and adoption as well. For example, the AI and data-center buildout needs power, making utilities and energy providers critical.

Goldman Sachs

AI capex boom set to extend but valuations have run ahead, so higher volatility, wider credit spreads likely even with equity upside. Even if AI-related areas can continue to perform well, we think there is more room than before for other areas — including cyclical parts of the market — to lead performance.

Goldman Sachs Asset Management

As the “Magnificent Seven” continue expanding their market share through strong core businesses and strategic reinvestment, the strong earnings power of these companies may set the stage for further gains. The hyperscalers’ AI capex (including Amazon, Google, Meta, Microsoft and Oracle) should remain durable into 2026. However, the trend of the big getting bigger is not entirely uniform, and there are some signs of homogeneity in performance among these large players to date evolving into greater dispersion.

Goldman Sachs Asset Management

Beyond the Mag7, enterprise adoption is broadening. AI applications are expanding fast, especially in areas like automation, customer engagement, and operational intelligence — creating opportunities for platforms that help businesses navigate AI integration. Small caps, particularly in defense, tech, consumer sectors, and increasingly health care, may be poised for growth.

Invesco

We think the artificial intelligence investment theme plays out further and think some of the parallels being drawn with previous bubbles don’t fully hold up. However, we favor rebalancing portfolios to navigate growing risks.

LGIM

While the jury is still out on the long-term economic implications of AI, we believe bubble concerns about current valuations are overblown.

LGIM

Rather than picking today’s best-known AI names and hoping their success continues, investors could instead consider investing in a wide range of companies driving AI adoption across many sectors and geographies, providing much more rounded exposure.

Neuberger Berman

As the race for AI leadership intensifies in 2026, the benefits should materialize faster and more emphatically. This will have profound implications for inflation, labor markets and asset prices. It will drive increasingly disparate macroeconomic and microeconomic outcomes, forcing more policy responses from governments.

Neuberger Berman

AI is a prospective driver of volatility as it remakes the economic leaderboard. Diversification across asset classes plus a focus on quality could help mitigate shocks stemming from AI-related disruption at the macro or micro levels.

Nuveen

US megacap tech companies may have less-than-clear monetization timelines around some aspects of AI profitability, but we think investors will continue to reward AI-related capex spending, which shows no sign of slowing down in the US. Outside of the US, other global equity markets appear cheaper, but we see no catalyst for a leadership shift.

Pictet Asset Management

As long as the AI ecosystem remains on track to deliver earnings growth of around 20% over the next two years, current valuations can be justified, and we would expect these stocks to continue to outperform. While we don’t think AI stocks are in bubble territory yet, we think there are reasons to be concerned about a cluster of megacap stocks that sit a notch below the magnificent seven, a cohort we call the "Terrific 20." Their valuations took off during 2025 without being underpinned by commensurate earnings growth, rendering them vulnerable to a sudden and dramatic reversal.

State Street

Fueled by transformative AI investment, robust capital spending, and supportive fiscal policies, US equities remain at the forefront of global markets — yet a careful eye on valuation risks is warranted. Diversifying across cyclical, defensive, and secular growth sectors can help investors navigate macroeconomic trends and strengthen portfolio resilience.

Vanguard

US technology stocks could well maintain their momentum given the rate of investment and anticipated earnings growth. But let us be clear: Risks are growing amid this exuberance, even if it appears “rational” by some metrics. More compelling investment opportunities are emerging elsewhere even for those investors most bullish on AI’s prospects.

Apollo Global Management

The forward-looking view of the consensus is that AI will continue to drive the performance of the S&P 500 in 2026. Investing in the S&P 500 today means largely investing in AI. In other words, the index no longer offers the diversification it once did.

BCA Research

AI-related CAPEX will probably accelerate in 2026 even if total spending does not meet hyperscaler projections. In isolation, nonresidential fixed investment will provide a tailwind to growth next year.

BlackRock Investment Institute

Major chokepoints – like power systems and the permitting of land – could constrain the AI buildout. We see private capital playing a critical role in financing future energy projects.

BNP Paribas

We identify three key risks: an AI-driven equity market correction; inflation resurgence from excess US stimulus, geopolitical energy shocks or EM dynamics; and renewed trade policy uncertainty triggered by a US Supreme Court ruling on tariffs.

BNY

Companies beyond tech that can capture AI-supported competitive advantages seem well positioned. The intersection of “fiscal-plus-AI” could become a structural accelerator, supporting growth in infrastructure, energy and metals.

Comerica Wealth Management

Artificial intelligence continues to be a transformative force, driving productivity gains across industries. Despite the enormous cash flow margin advantage, technology valuations are elevated, warranting cautious investment as we have been in a record momentum-driven market with controversy brewing around valuations, retail and high-frequency trading, and debt financing.

Fidelity International

AI will be the defining theme for equity markets in 2026. It should continue to propel stocks forward, and there is real substance to the underlying technology even as questions mount over its application. It is wise to understand those risks, and where best to diversify.

Future Standard

Three years into the AI trade, stocks head into a new phase. The S&P 500 has gained more than 80% since ChatGPT’s launch three years ago, with AI-related names driving nearly three-quarters of the return. While the earnings backdrop remains quite healthy overall, surging capex is set to pressure the cash flow generation of many tech giants. This is likely to make for a choppier, less unified AI trade.

Future Standard

The artificial intelligence theme has become so significant, investors should consider ways to ensure diversification between AI builders and AI users. Public markets are concentrated in the former, while private markets offer an opportunity to allocate to the latter at scale.

iCapital Research

Financing and depreciation schedules in AI could pressure earnings and valuations. While we should gain more clarity on these topics next year, it will be important for investors to be selective in their approach to the AI theme in 2026.

Janus Henderson

We believe that expectations for AI and European growth are well founded. Each of these themes, in our view, represents the type of sea change that can propel economic growth to a higher trajectory, expand corporate margins, and compound earnings over an extended period.

Janus Henderson

The AI rollout is unfolding quickly, and we soon expect a handoff to commence between the enablers that are deploying capacity and the enhancers – often software companies that effectively integrate AI into their product suite – and finally end users.

NatWest

AI is a powerful engine of economic expansion, and capital expenditure within the sector is likely to continue. But adoption is still in its early stages. This leaves substantial room for growth, although we are likely to see some turbulence along the way.

NatWest

Volatility in the short term is quite possible and concerns about an AI bubble persist. However, unlike previous tech-led change, today’s AI leaders boast strong earnings and are funding expansion from vast cash reserves.

Ned Davis Research

AI investments and demographic shifts are poised to impact productivity and economic performance in key global economies.

Tallbacken Capital

We suspect the Mag Seven will continue to have strong earnings and operating and net income margins in 2026-7. However, these same companies are going through an unprecedented pivot in their free cash flow profile, while their free cash flow yields are already at record lows. If there are indications that the AI spend will not translate into compelling ROIC, we should expect a substantial re-rate in their discount rates and multiples. The “Oracle dark cloud” may continue to hover until we see clarity on long-term revenue and earnings growth pick up.

Tallbacken Capital

In an environment defined by re-engineering global supply chains and the massive implications of AI, scale is needed. Larger companies will, by and large, outperform smaller companies. Obviously, there will be many compelling specific investments in small caps. Some of that specific company outperformance may come from M&A as companies seek scale.

Apollo Global Management

While we do believe that AI will continue to grow, if there was a slowdown in the space, we can expect that impact to be felt across the economy. It would have negative consequences not just for data centers, but also for stocks, consumers and beyond. We’ll be carefully monitoring for any signals of weakening AI demand.

Barclays Private Bank

The pace of new AI commitments is likely to slow and the focus will shift to delivering on the announced projects. This may still translate into solid GDP growth but may not support equity markets as much.

BlackRock Investment Institute

AI will likely keep trumping tariffs and traditional macro drivers as it has in 2025. In a world where US trend growth stays under 2%, absorbing that capex will require big macro adjustments – crowding out other non-AI spending in the economy, and potentially resulting in much higher inflation.

BNP Paribas Asset Management

We believe the AI theme is not yet in bubble territory. Expectations for the leaders of AI are high, but valuations remain reasonable. However, we are aware of and monitoring several risk factors going forward and are watching for signs of a digestion period in the spending cycle.

Goldman Sachs

The key risks are that a fragile job market sparks recession fear or the equity market questions the value of AI-related revenues. Shorter-term US rates exposure should be protective in these situations.

Lazard Asset Management

AI-related capex is increasingly debt funded, with assets that may become obsolete in a relatively short period of time, raising the risk of overcapacity and delayed returns. If tech earnings disappoint, the broader market could face meaningful drawdowns given its dependence on this sector. Security selection among AI leaders will be critical in 2026.

Macquarie

AI will increasingly influence labor markets, capital allocation, profitability and national industrial strategies, with 2026 likely to mark a year of transition from experimentation to more widespread implementation.

Tallbacken Capital

The key macro risk next year comes down to AI infrastructure: if the AI fixed asset boom is not able to provide a convincing Return on Invested Capital (ROIC), we expect a broader sell-off in equities and more speculative credit. We need to remind ourselves that the AI capex spend is dramatically larger than most governments’ fiscal programs; the micro risk is now the macro risk.

Janus Henderson

We see AI innovation as a sustainable catalyst. It changes how businesses operate and deliver services, with the resulting productivity enhancements having the potential to fuel economic growth across all sectors. Health care is currently one area we’re seeing meaningful innovation as a result of AI.

Federated Hermes

Federated Hermes has upgraded its forward earnings outlook and we’ve also increased our 2026 S&P 500 price target from 7,500 to 7,800.

Morgan Stanley

US equities should outperform global peers in 2026, with the S&P 500 rising to 7,800 in the next 12 months — a 14% gain from its current level, compared with expected gains of 7% for Japan’s TOPIX and 4% for the MSCI Europe.

Societe Generale

We increase our equity holdings by 5 points to 55%, broadly diversified across geographies except for Japan. This move is also supported by the onset of a new releveraging cycle driven by M&A activity (credit rating downgrades in the pipeline), which leads us to downgrade corporate bonds by a further 5 points to 5%.

Societe Generale

Emerging market (EM) assets should continue to enjoy a goldilocks environment, driven by sound macroeconomic policies that prioritize low inflation and debt sustainability over growth. As a result, we increase our allocation to EM bonds by an additional 3 points to 10%, and to EM equities—divided between global exposure, which rises by 3 points to 6%, and direct China exposure, which is up by 1 point to 4%.

Truist Wealth

We enter 2026 with a tilt toward equities given our expectation for an uptick in the economy and solid earnings growth. We hold a US and large cap growth tilt, though see exposure to small caps as important given our expectation of another year of sharp rotations.

UBS

China’s tech sector stands out as a top global opportunity. Strong liquidity, retail flows, and earnings expected to rise to 37% in 2026, should sustain momentum for Chinese equities. Broader Asian exposure, in particular to India and Singapore, could provide additional benefits for investors seeking diversification, as could emerging markets.

UniCredit

Equities retain upside potential, led by US stocks powered by AI-driven productivity gains and fiscal investment. Europe's outlook is supported by defense and infrastructure spending, though soft demand and slower tech adoption temper momentum. The S&P 500 is forecast to reach 7,600, while Euro STOXX 50 may climb to 6,200.

BlackRock Investment Institute

We like Japanese equities on strong nominal growth and corporate governance reforms.

BNP Paribas

We see equity markets reaccelerating following the current consolidation phase and remain bullish credit, with key opportunities in the high-yield sector.

BNY

Rising productivity and ongoing AI adoption should further reinforce record-level margins and long-term earnings growth. In our view, higher valuations reflect stronger fundamentals.

Brandywine Global

We see the equities opportunity set broadening, particularly in regions and sectors where expectations remain muted. Our portfolio continues to carry a significant underweight to the US and meaningful overweights in Europe, the UK, and parts of emerging markets. Many of these markets combine low valuations, improving earnings trends, and supportive policy dynamics.

Capital Economics

There is no question that equity valuations are high, especially in the US. But they are not yet as stretched as they were during the last tech-driven equities bubble in the late 1990s and earnings growth should remain solid. As such, we think equities can keep rallying for a while yet: we forecast the S&P 500 to rise to 8,000 by the end of 2026.

Capital Group

Compelling opportunities exist across industrials tied to capital spending, financials potentially benefiting from regulatory shifts, and select sectors such as energy and transportation. The AI investment cycle also remains powerful, with productivity gains spreading well beyond the technology sector. Large tech companies continue to drive demand for advanced chips, power infrastructure and robotics, while businesses from financials to health care deploy AI to improve productivity.

Carmignac

In equities, a barbell approach that pairs AI and tech leaders with defensive health care and staples, capturing both high-end and mass-market dynamics in a two-tier consumer economy.

Charles Schwab

Developed-market international stocks could provide diversification to the tech-heavy S&P 500 index. Germany is embarking on a massive fiscal stimulus plan and Japanese companies are enacting shareholder-friendly reforms.

Citi

While we think that we are in a bubble in US equities, bubbles are initially quite profitable, we remain overweight US equities, and China. The UK remains our underweight. In sectors, we upgrade health care to overweight while downgrading utilities to neutral. We are overweight communications, financials, health care, and tech vs. underweight in consumer staples, materials, and real estate.

Columbia Threadneedle

We anticipate that pockets of earnings growth in Europe and Japan will keep pace with the US, and a broader range of sectors look capable of delivering appreciation. Defence and financials are two notable examples.

DWS

Our optimism for equities remains, especially in the US: The S&P 500 could reach around 7,500 points by end-2026, driven by earnings growth and AI investments. Financials could benefit from moderate yields and deregulation.

Evercore ISI

The bull market will extend in 2026, underpinned by the ongoing AI revolution and reinforced by solid if unremarkable economic growth, and fiscal and monetary stimulus (OBBB, Fed cut cycle). Importantly, the signs that have historically ended bull markets – recession, “uncooperative” Fed, exuberant investor and capital markets sentiment – are absent. Base case is S&P 500 at 7,750 at yearend.

Evercore ISI

Communication services, consumer discretionary and information technology – all homes to AI leaders – are rated outperform in 2026. Communication services additionally benefit from BBB tax incentives and media-heavy year, consumer discretionary from stimulus supporting the lower end of the K-shaped economy.

Evercore ISI

Below trend US and sluggish global growth – evident in slow manufacturing, oil supply glut, weak industrial materials – expensive valuations, and downward earnings revisions underpin underperform ratings for energy, industrials, and materials.

Evercore ISI

As we near 2026, Evercore ISI assigns a 30% probability to an AI-driven market bubble inflating, potentially driving the S&P 500 to 9,000 by year-end, amid rising FOMO and speculative echoes of past eras like Y2K. Yet, with AI adoption reaching its hottest, ample sidelined cash, restrained margin use, and leader gains and valuations paling against Dotcom peaks, a full bubble remains on the horizon. To capitalize, we roll our June 2026 upside calls to Dec. 2026 for limited-risk, high-reward exposure to explosive potential gains in the AI Revolution Class of 2025.

Federated Hermes

AI productivity gains should begin to accelerate. Across the world, companies of every stripe are incorporating the AI revolution into their work processes, likely unleashing a new era of productivity gains.

Federated Hermes

Inbound investment to the US should be a new driver. In our visits with corporate management, company after company said they are particularly focused on this issue, and not just in relation to the US but also elsewhere.

Federated Hermes

Corporate margins should continue to expand due to ongoing economic mix shift, along with widening AI investments. Over the last decade, it’s been common to hear warnings of “peak profit margins.” Although margins have vacillated, the long-term trend suggests that, in fact, corporate profit margins have steadily increased over the last 20 years by an average 4% per year. When you add it all up, we think it’s time to acknowledge that the base case is continued margin expansion, not “peak margins.”

Federated Hermes

"Animal spirits" are heating up. The pick-up in M&A announcements, rising IPO activity and the bounce in confidence surveys all augur well for forward activity.

Federated Hermes

Earnings are on track to reach nearly $400 by 2028. When you factor in even relatively conservative margin gains ahead, alongside rising top lines due to higher nominal GDP growth and the ever-improving profitability mix of the companies that make up the US stock market, we believe earnings for the S&P are looking pretty solid.

Federated Hermes

The market multiple should also grind higher. As we first noted in our equity market outlook for 2025 and 2026, when you adjust appropriately for the recent mix shift in the S&P toward tech firms, a fair multiple for the overall index these days is probably around 22x. This is considerably higher than the long-term average of 18x when the S&P was a more industrial-oriented index.

Federated Hermes

We think a reasonable two-year S&P target is close to 8,600, implying an annual gain north of 14%. This level of return is a bit lower than the 17% annual return for the S&P over the last five years of the post-pandemic recovery but higher than the long-term annual return on stocks of 12% over the last 50 years.

Franklin Templeton

We believe emerging debt and equity markets, European equities, and US smaller-capitalization stocks should lead the way in 2026. Still, US equity returns, including in the leading information technology sector, should remain solid, in our view.

Goldman Sachs

We think equities should continue to deliver solid positive returns in 2026, even after two strong years. As in 2025, we think the case for diversification is strong. Regionally, we think EM and Japan have scope for continued good performance in our central case.

Goldman Sachs Asset Management

Positive tailwinds in Japan driven by moderating inflation, stable monetary policy, and potential increased fiscal support from a Takaichi-led government should persist into 2026. Global megatrends, including AI, semiconductor strengths, and geopolitical shifts, also support this market. Although valuations are above historical averages, earnings growth and corporate reforms justify continued optimism.

HSBC

We see opportunities widening across sectors in the AI ecosystem. Industrials and Utilities should benefit from the growing demand for digital infrastructure and electricity, while long-term structural initiatives continue to prioritize reshoring and re-industrialization to strengthen strategic autonomy in supply chains, especially in technology and defense.

HSBC

In the US, we diversify beyond IT and communications into financials, industrials and utilities, while remaining overweight on financials, industrials and utilities in Europe. In Asia, IT, consumer discretionary, financials, communications and health care are our preferred sectors.

iCapital Research

Beyond AI, we see continued tailwinds around cybersecurity, cloud, fintech, defense tech, and crypto, as industries are reshaped and redefined by innovative new companies.

iCapital Research

Expect mid-to-high single-digit returns in equities, driven by earnings growth. We see the fair value for the S&P 500 near 7,200-7,400—assuming a modest multiple compression.

Invesco

US stock markets, particularly the AI-driven tech sector, are seen as expensive, but we see compelling opportunities elsewhere. We believe non-US market, smaller-capitalization, and US cyclical sector stocks (ones that tend to do well when the economy grows) are attractively priced.

JPMorgan Asset Management

While we are broadly positive on Europe, we nonetheless recommend investors are selective, focusing on three main areas: banks, fiscal beneficiaries, and the GRANOLAS (GSK, Roche, ASML, Nestle, Novartis, Novo Nordisk, L’Oréal, LVMH, AstraZeneca, SAP and Sanofi).

JPMorgan Chase & Co.

We are positive on global equities for 2026, forecasting double-digit gains across both developed markets and emerging markets. This bullish outlook is buttressed by factors including robust earnings growth, lower rates, declining policy headwinds and the continued rise of AI.

JPMorgan Chase & Co.

Looking at the S&P 500, we estimate the AI supercycle driving above-trend earnings growth of 13–15% for at least the next two years.

JPMorgan Wealth Management

We believe investors can further diversify their portfolios through regional equity diversification. Currency exposure in European and other non-US equity markets is left unhedged, which provides local currency diversification.

JPMorgan Wealth Management

We find attractive investment prospects in sectors and assets that benefit from onshoring, near shoring and the reconfiguration of supply chains. These include North American infrastructure, utilities, industrials and logistics, as well as companies involved in power generation, semiconductors and critical minerals.

JPMorgan Wealth Management

We look for businesses with pricing power in critical sectors such as semiconductors, data centers, energy and transportation. A steeper yield curve could benefit banks, which remain one of our preferred equity sectors.

Lazard Asset Management

Emerging markets are particularly appealing, and they can offer AI exposure at far lower valuations — the MSCI EM Technology sector trades at ~40% below its US counterpart — alongside multiple uncorrelated growth drivers.

Lazard Asset Management

Japanese equities also look attractive, with policy support for consumption and corporate returns, even if GDP growth remains modest.

Lombard Odier

Emerging markets stand out as a bright spot as we enter 2026. The region’s equity markets outperformed in the latter part of 2025, and we expect this trend to continue.

Lombard Odier

We favor broadening exposure to regions and sectors that combine growth resilience with reasonable valuations. In general, dividend-paying equities offer stable income in a context of unspectacular growth. Quality dividend stocks in sectors like health care provide both yield and defensive qualities while benefitting from demographic and innovation tailwinds. Commodity-linked equities, in particular materials, have also lagged the broader market in 2025, and offer comparatively better value now. Utilities should also continue to offer attractive exposure to electrification and AI, with reasonably high dividends.

LPL Financial

The equity bull market appears poised to extend its run in 2026, fueled by ongoing enthusiasm around AI and further easing of monetary policy from the Fed. However, with valuations running high and mid-term election years often bringing more volatility, gains may be more tempered in 2026. Maintain current allocations and stay patient for pullbacks to selectively increase equity exposures.

LPL Financial

LPL Research’s year-end 2026 fair value target range on the S&P 500 is 7,300 to 7,400, based on 23 times $320 in S&P 500 earnings per share in 2027, a 10% increase from our upwardly revised 2026 estimate of $290. We place the odds of this scenario at around 60%.

Morgan Stanley

European and emerging market equities aren’t likely to benefit from similar tailwinds that are boosting US stocks. Tepid forecasts for growth in the euro zone and structural challenges, with the region losing ground in manufacturing to China, cloud the outlook for European equities. Chinese stocks face headwinds from the country’s slow reflation progress.

Morgan Stanley

In Japan, the narrative is more positive: stocks are likely to get support from fiscal and regulatory reforms, besides domestic flows into equities.

Neuberger Berman

Target AI thematically, employing diversification across regions and sectors to optimize returns rather than concentrating exposure. Seek out companies that are seeing tangible results and/or accruing measurable benefits. Consider AI-adjacent targets (e.g., power suppliers), focusing on companies or industries rapidly adopting AI or supporting its buildout, including financials, industrials and health care.

Neuberger Berman

European equities are likely to face pressure on falling earnings expectations and a more challenging macro/policy backdrop; European fixed income (Bunds, corporate credit) looks attractive ahead of additional monetary easing.

Neuberger Berman

We expect Japan equities to continue benefitting from earnings strength, share buybacks, corporate governance reforms and attractive valuations.

Nuveen

We suggest a barbell approach balancing growth-oriented US tech/AI with more defensive positioning in dividend growers and listed infrastructure, both of which offer income and potentially lower volatility.

Nuveen

Ongoing US dominance in tech, combined with favorable tax and regulatory policies (which should help financials in particular), supports our preference for US large caps over small caps and other developed markets. Emerging markets have performed well recently, but we remain cautious given potential vulnerability to evolving trade policy risks.

Nuveen

In public markets, we favor electric utilities trading at a discount while delivering accelerating earnings growth. In private markets, we focus on investments aligned with climate and digital transformations – such as clean energy generation, energy storage and data centers.

Pictet Asset Management

We expect the following to outperform the MSCI World Index: mid-sized domestic companies and value-oriented stocks in Europe, growth stocks in the US and, above all, emerging markets. We also recommend adding exposure to shares in high-quality businesses – those with steady earnings growth and high profitability – as a hedge against any adverse macroeconomic or geopolitical surprises.

Pictet Asset Management

Quality stocks – those with a track record of steady earnings, high profitability and low leverage – are likely to resume their role of helping to protect portfolios from downside risks during phases of market volatility. Pharmaceutical companies look particularly promising. We also like technology, financials and industrials, all three of which are on track to deliver strong earnings growth.

Principal Asset Management

In 2026, the equities narrative will shift from AI potential to execution, favoring firms with real productivity gains. A fundamentals-first approach, focused on free cash flow and valuation, will be critical amid liquidity-driven distortions. Sector standouts include US banks, biotechnology, copper, and consumer names poised to benefit from fiscal support. Global opportunities exist, particularly in Japan and select emerging markets, but require careful, region-specific evaluation.

Robeco

While another +20% S&P 500 rally in 2026 would be astonishing judging from the already immense rally, it does signal potential for a melt-up. While historically stretched valuations make for a challenging starting point to 2026, a more synchronized re-acceleration of the global economy bodes well for the earnings outlook.

Robeco

Consensus expectations of China outperforming the rest of EM in 2026 are also subdued, making this a more contrarian trade. We like euro-zone equities on attractive valuations, weaker dollar, moderate energy prices, a further acceleration in euro zone growth spurred by fiscal stimulus, positive money growth and improving consumer sentiment.

Russell Investments

The defining force for equity markets continues to be the AI buildout, but its impact is changing. The early infrastructure cycle — led by hyperscalers and semiconductor firms — is now expanding into broader corporate adoption. Companies that apply AI to boost productivity and margins are emerging as the next beneficiaries.

Russell Investments

For investors, this environment supports a balanced approach: diversified, quality-oriented equity exposure complemented by private and growth-stage strategies positioned to harness structural innovation.

Russell Investments

While equities trade near all-time highs and valuation multiples are high relative to history, our proprietary indicator of market psychology for the S&P 500 does not show worrying signs of euphoria that would motivate a more cautious tactical posture in portfolios.

Russell Investments

We see particular value where fundamentals are improving yet pricing remains reasonable — from emerging-market technology to European cyclicals and US firms embedding AI to drive efficiency gains. High-momentum names remain underweighted as teams focus on durable earnings and balanced regional exposure. The emerging markets remain a preferred overweight in our global equity strategies for 2026.

Russell Investments

Improving global earnings fundamentals and the potential for the trade-weighted US dollar to weaken supports the case for global diversification, with emerging markets being one potential area of opportunity for active management to shine.

Russell Investments

Based on current sentiment levels, we believe equities may outperform bonds over the next 12 months. We believe retail and institutional investors should stay invested with risk levels up near strategic targets.

Schroders

Elevated equity valuations are sustainable for the time being. Short-term interest rates in many countries are likely to fall, providing support to market multiples, specifically in the US. As confidence levels in economies such as China, India or Brazil begin to improve, there could be strong demand for assets in these markets, particularly given diversified risk exposure.

Schroders

We are finding opportunities for diversification. It hasn’t been all about AI. 2025 has shown the benefit of geographical diversification and Value has performed outside the United States.

Schroders

US dollar depreciation would provide a tailwind to EM relative equity performance as it eases financial conditions and has a positive translation effect, benefitting dollar-nominal growth and earnings. We believe EM equities continue to offer value and that investors can benefit from the diversification benefits and active investment opportunities that this market provides.

Societe Generale

Demand growth for AI continues to outpace supply growth. For now, we maintain exposure to hyperscalers, while we have found risks in free cash flow burners, particularly within private markets.

Societe Generale

Among the investment themes that investors can gain exposure to via equity baskets, our preference would be to invest in the new global-policy order (US reshoring, next China winners, European sovereignty), Greenflation (copper supply chain), Japan domestic demand, and for AI, cybersecurity and rise of the robots.

State Street

For emerging markets, we hold a broadly constructive outlook heading into 2026 as AI-driven global growth, loose liquidity, and a weak US dollar act as tailwinds. We retain a positive outlook on emerging market debt, with a slight preference for local currency bonds.

T. Rowe Price

In 2026, we anticipate broader market participation and a widening spectrum of opportunities — both within AI‑related sectors and across a diverse range of industries and regions. We expect small-caps to be among the biggest beneficiaries of that shift. Even a modest move into small-caps would provide a relatively large boost to smaller stocks.

T. Rowe Price

Outside of the US, Japan stands out for attractive valuations, robust cash flow, and improved corporate governance. Europe is quietly entering a new expansion phase. European industrial and automation franchises appear to be particularly well positioned to participate in the buildout of “physical AI” such as robots, autonomous systems, and drones. China remains a tactical opportunity set, while the outlook for ex‑China EM stocks also looks broadly positive.

T. Rowe Price

While we are neutral on growth versus value stocks in the US, in international equities we prefer value companies. The global cyclical backdrop is improving, and sectors such as financials — heavily represented in value indexes — should benefit from steeper yield curves and improving loan demand. Valuations for non‑US value stocks also remain relatively attractive.

Truist Wealth

We start off the year still leaning into our power hitters – technology and AI, which are dominant themes driving this bull market. Our work shows that the leaders of a bull market tend to endure to the end of the cycle, notwithstanding periodic pullbacks and rotations.

Truist Wealth

The concentration in star players remains a risk, but they’ve performed well so far, and we’re sticking with them. At the same time, we anticipate broader market participation compared to the past year and view modest small cap exposure as a way to capture this opportunity. We're overweight technology, communication services, and health care.

Truist Wealth

We retain a US bias. US equities underperformed over the past year, partly due to a rebound in international markets following years of extreme underperformance and dollar weakness. Innovation and earnings trends in the US remain superior.

UBS

AI and technology have been key drivers of global equity markets and should fuel further gains in 2026. While being mindful of bubble risks, allocating up to 30% of a diversified equity portfolio to structural trends including AI, longevity, as well as power and resources, is recommended.

UBS

Supportive economic conditions should underpin global equities, which are expected to rise by around 15% by the end of 2026. Solid US growth and accommodative fiscal and monetary policy favor technology, utilities, health care, and banking, with gains likely in the US, China, Japan, and Europe.

UniCredit

In our view, there is no AI bubble, but this does not mean that there are no risks. But we need to look at them through the right lens. Comparisons with the dotcom bubble are misleading. The Mag 7 are not start-ups with exciting business ideas but no products to sell. They are mature, cash-rich and earnings-generating companies

Vanguard

The heady expectations of US technology stocks are unlikely to be met for at least two reasons. The first is the already-high earnings expectations and the second is the typical underestimation of creative destruction from new entrants into the sector which erodes aggregate profitability.

Vanguard

Our muted US stock return forecast of 4%–5% average returns over the next five-to-10 years is nearly single-handedly driven by our risk-return assessment of large-cap technology companies.

Vanguard

Both US value-oriented and non-US developed-market equities should benefit most over time as AI’s eventual boost to growth broadens to consumers of AI technology. Economic transformations are often accompanied by such equity market shifts over the full technology cycle.

Wells Fargo Investment Institute

We expect that accelerating economic growth, lower short-term interest rates, and moderating inflation will support sales, margins, earnings growth, and equity returns in 2026.

Wells Fargo Investment Institute

We expect stock prices to continue to look beyond the noise of a midterm election year and to march higher, driven primarily by earnings growth rather than price-to-earnings (P/E) valuation expansion.

Wells Fargo Investment Institute

We rate US Large Cap Equities and US Mid Cap Equities as favorable, compared with an unfavorable rating on US Small Cap Equities. Within international equities, we hold a neutral rating on both Developed Market (DM) ex-US Equities and Emerging Market (EM) Equities.

Wells Fargo Investment Institute

In 2026, we expect to see artificial intelligence develop further from a concentrated technology phenomenon into a broad-based economic growth catalyst. The technology, energy and infrastructure demands of digital assets, autonomous vehicle production, growing defense needs, and industrial automation more broadly should drive opportunities in the industrials and utilities equity sectors.

Allspring Global Investments

While headline equity index valuations remain elevated, beneath the surface we see sector opportunities as capital spending and new depreciation incentives support broader adoption of AI across industries such as health care, manufacturing, transportation, and financial services.

Allspring Global Investments

Profitable US small- and mid-cap equities offer relative value and are positioned to benefit from lower interest rates and renewed merger and acquisition activity.

Amundi Investment Institute

In equities, we favor exposure beyond the AI-race into the broadening tech theme - including power energy, computing, materials needed to overcome physical constrains that are building - and a combination of defensive and cyclical themes.

Amundi Investment Institute

European industrials and infrastructure should provide new entry points in the second half of 2026 to benefit from a structurally weaker dollar and longer-term themes. We are positive on European financial, industrial, defense and green-transition sectors, as well as on small and mid-caps. Europe can still play the tech cycle through industrials and capital goods.

Amundi Investment Institute

EM bonds stand out for high income and diversification. We like attractive yields in hard currency debt. In local currency debt, we favour Central and Eastern Europe, selective parts of LatAm (Columbia, Brazil) and Asia (India, Philippines and Korea) for carry and valuation. We are positive on EM equities and see notable pockets of opportunities favoring value and momentum styles in LatAm and Eastern Europe and selectively in Asia, in sectors linked to digital assets.

Bank of America

We expect 14% EPS growth but only 4-5% S&P price appreciation, with a year-end target of 7,100 for the index. We are watching for signs that suggest we could be shifting from a consumption-driven bull market to a capex-driven one.

Barclays Private Bank

The UK stands out as a diversifier and defensive income play. UK equities trade at one of their widest valuation discounts to global peers in two decades, while offering superior dividend yields and a favourable sector mix.

Barclays Private Bank

European valuations remain attractive relative to global peers. Political risks in France and fiscal uncertainty in Germany still weigh on sentiment, but improving corporate fundamentals support a constructive view, with potential to add to holdings on price weakness.

Barclays Private Bank

Emerging market equities remain inexpensive versus developed markets. As US growth normalises and monetary policy eases, a softer dollar could become a tailwind. Exposure to AI-related supply chains in Asia, policy support in China and improving external balances across several EM economies reinforce the case for selective recovery.

BCA Research

It is unclear whether US equities will out or underperform in response to a US recession. For now, we recommend neutral regional equity positioning. Favor global ex-US equities in a non-recessionary equity market selloff.

Bel Air Investment Advisors

Despite some concerns around valuations and consumer sentiment, equity markets remain near all-time highs. Strong earnings growth, combined with expectations for a more accommodative Federal Reserve, continues to support risk assets. Additional catalysts for market upside include the recent end of quantitative tightening and new tax breaks stemming from the One Big Beautiful Bill Act.

BlackRock Investment Institute

We see the AI theme supported by strong earnings, resilient profit margins and healthy balance sheets at large listed tech companies. Continued Fed easing into 2026 and reduced policy uncertainty underpin our overweight to US equities.

BlackRock Investment Institute

We like EM hard currency debt tactically given attractive income, limited issuance and stronger sovereign balance sheets. On a long-term horizon, we favor EM equities at the cross current of mega forces, like India.

BNP Paribas Asset Management

European equities offer compelling value, particularly as the region pursues greater strategic autonomy, potentially offering a broadening set of opportunities for forward-looking investors.

BNY

US earnings momentum is expanding beyond mega-cap names. Europe benefits from fiscal spending and policy easing, while Japan’s transition is driving progress on inflation and consumption.

Brandywine Global

We remain selective around AI. Revolutionary technologies can be life changing and bubble prone at the same time. Railway mania in the 1840s, the dot-com period, and today’s data center buildout all share the same pattern. Our focus is on the broader ecosystem of beneficiaries rather than the narrow group of headline winners.

Capital Group

Positive investor sentiment could continue to boost stocks in 2026 as the US economy avoids a downturn and grows at a moderate pace. Generally favorable macroeconomic conditions are providing a positive backdrop for corporate earnings.

Capital Group

Equity market opportunities have broadened meaningfully since 2025, with non-US markets outpacing both the Magnificent Seven and S&P 500 Index, and more US stocks joining the market rally. This global opportunity set continue to widen as governments in Europe inject infrastructure and defense spending into their economies and corporate reforms in Japan and other Asian economies boost companies.

Charles Schwab

US equity investors are encouraged to focus on sector diversification away from just tech and narrative-driven segments in line with expectations of a broadening out of performance.

Charles Schwab

We do believe there will continue to be cannibalization and leapfrogging in play across the AI sphere in 2026, including less of an obsessive focus on cohorts like the Magnificent Seven. Given that only two of its cohorts are outperforming the index so far in 2025, and our expectation of some market broadening, a monolithic approach increasingly does not make sense.

Charles Schwab

International stocks could be poised for another strong year in 2026 due to accelerating global growth, attractive valuations and the potential for dollar weakness.

Charles Schwab

Emerging-market stocks may provide investors an alternate way to participate in the growth of AI. China, for example, has the advantage of plentiful low-cost electricity, a key AI input.

Citi

Despite concerns of a US equity market bubble driven by AI investment, strategic portfolio diversification into China's AI value chain, financials, and base metals is recommended for sustained performance.

Columbia Threadneedle

We maintain a constructive outlook for equities, with a broadening of opportunities for selective investment, backed by disciplined diversification.

Columbia Threadneedle

US company earnings will likely be a key driver of equity returns in 2026. Our expectations are for robust growth with the likelihood of upside surprises exceeding the potential for disappointment. Our base case is for high single-digit gains with scope for low double-digits at the upper end of our forecasts.

Columbia Threadneedle

From a market capitalization perspective, we see firmer support for small cap stocks. The path of interest rates will be stimulative for companies more closely geared to the economic cycle.

Columbia Threadneedle

We expect a broadening of performance across sectors and industries in Europe, including into areas like financials and industrials. At the same time, we are mindful of risks, especially in countries like France, where political uncertainties cast doubt on economic discipline and the sustainability of high debt levels.

Comerica Wealth Management

US equities have enjoyed a prolonged bull run, now entering a fourth consecutive year. While valuations appear stretched, selective opportunities remain, particularly in sectors aligned with a steeper yield curve including traditional value sectors like financials.

Comerica Wealth Management

European markets also offer relative value, with potential upside as economic reforms take hold. Emerging markets, especially India, presents robust growth prospects, supported by demographic trends and economic reforms.

Deutsche Bank

We maintain a broadly constructive outlook for equity markets in 2026. This will be partly due to strong demand for new AI-based applications, which should continue to drive substantial corporate investment flows. Beneficiaries will not only include US “Big Tech” but also a wide range of sectors – construction (thanks to new data centers), utilities (via higher electricity demand) and industrial and basic materials along the supply chain.

Deutsche Bank

In 2026, we expect the US equity market to remain an attractive investment destination and generate strong inflows into the dollar.

Deutsche Bank

Our earnings growth forecasts for companies across all major regions are therefore firmly in double-digit territory.

DWS

The AI boom offers surprises both up and down, so we do not favor the tech-heavy US over other regions.

Evercore ISI

2026 is primed to be a more volatile year for the stock market, even than 2025 (remember April?). Historically elevated equity valuations inherently mean higher sensitivity to economic data, earnings reports, headlines, Fedspeak – anything – that may be perceived as “less than perfect.”

Fidelity International

Valuations point to opportunities in Europe; Japan is returning to growth, and a broader bull market in China may just be getting going.

Fidelity International

Accommodative fiscal and monetary policy, and decent earnings, mean we are risk-on for equities. Select emerging market equities in particular look attractive for 2026.

Franklin Templeton

Longer term, the key driver of returns remains innovation, above all in the information technology sector, private investments and digital finance.

Global X

The AI ecosystem is likely to remain a compelling investment given the expected impact of automation across the economy. The most direct route is investing in the companies developing and delivering the AI software and hardware solutions.

Global X

Exposure to mega-cap tech is important, but other players are critical to the buildout and adoption as well. For example, the AI and data-center buildout needs power, making utilities and energy providers critical.

Global X

Finding attractively valued assets with strong fundamentals has become more challenging as markets have risen, but data centers stand out. Data storage and processing needs keep hitting new highs, and operators typically benefit from strong margins because switching providers is costly and time-consuming.

Global X

We believe copper miners remain reasonably valued.

Global X

US infrastructure valuations look compelling. The tariff s on steel, aluminum, and copper may support profitability of US-domiciled producers that sell most of their goods within the US market.

Goldman Sachs

If we are right that markets will need to upgrade their cyclical views, while still being able to relax about inflation risk, those shifts should support risk assets in general. The composition of that upgrade likely favors assets that are geared to improving US demand, China’s export engine, and some recovery in global trade. Some cyclical assets that saw more weakness in 2025—including in US housing and consumer-related areas—may also find more support in 2026 as the growth backdrop looks more secure.

Goldman Sachs

AI capex boom set to extend but valuations have run ahead, so higher volatility, wider credit spreads likely even with equity upside. Even if AI-related areas can continue to perform well, we think there is more room than before for other areas — including cyclical parts of the market — to lead performance.

Goldman Sachs Asset Management

There’s potential for greater equity market dispersion, with a favor toward global equity diversification and a blend of fundamental and quantitative strategies.

Goldman Sachs Asset Management

As the “Magnificent Seven” continue expanding their market share through strong core businesses and strategic reinvestment, the strong earnings power of these companies may set the stage for further gains. The hyperscalers’ AI capex (including Amazon, Google, Meta, Microsoft and Oracle) should remain durable into 2026. However, the trend of the big getting bigger is not entirely uniform, and there are some signs of homogeneity in performance among these large players to date evolving into greater dispersion.

Goldman Sachs Asset Management

Beyond the Mag7, enterprise adoption is broadening. AI applications are expanding fast, especially in areas like automation, customer engagement, and operational intelligence — creating opportunities for platforms that help businesses navigate AI integration. Small caps, particularly in defense, tech, consumer sectors, and increasingly health care, may be poised for growth.

Goldman Sachs Asset Management

Look for more capex spending in Europe, driven by fiscal flexibility and reindustrialization. European markets have the potential for continued outperformance within defense, energy, and financials sectors and possible improved performance from currently lagging sectors, which will be key for broader market advancement and sustained fund inflows into European equities.

Goldman Sachs Asset Management

Various macro conditions supported emerging markets in 2025 including a softening US dollar, declining oil prices, easing inflation, and a dovish Federal Reserve stance, and there’s possible promise for outperformance in 2026. EM equities currently trade at approximately a 40% forward P/E discount to US equities, below the long-term average. This discount is expected to narrow given EM's strong earnings profile.

HSBC

We remain overweight on global equities, with the US continuing to represent an overweight. We favor mainland China, Singapore, South Korea, Japan and Hong Kong in Asia. We prefer the UAE and South Africa in the EM EMEA region.

iCapital Research

Given this selective approach, the names that make up the market leadership could change in 2026. This is highlighted by the growing dispersion in the Magnificent Seven. However, we don’t foresee a sustained broadening and think rotations will be a more defining feature for markets.

Invesco

We believe there are AI opportunities that are more attractively priced, Chinese technology stocks, for example. The AI theme can play out along other angles. For example, companies that adopt AI may see cost efficiencies or new product offerings.

Invesco

Strategies that broaden exposure beyond traditional market-cap-weighted approaches may be a prudent way to reduce the risk of overexposure to a few of the largest AI-driven stocks.

Invesco

Emerging market stocks posted outsized returns in 2025, and we believe there are continued reasons for that outperformance to potentially continue in 2026.

Janus Henderson

We believe the next leg of a European rally will be more substantive, as the earnings growth that ultimately determines stock performance could reset set to a higher trajectory than investors have come to expect.

JPMorgan Asset Management

We are modestly positive on China. While the Chinese market has rallied nearly 80% since its low in early 2024, we believe that the bull market can continue, albeit at a more moderate pace, driven by both earnings and valuations.

JPMorgan Chase & Co.

Sanaenomics — the economic policies of new Japanese Prime Minister Sanae Takaichi — and corporate reforms will likely propel Japanese equities in 2026. Businesses will likely focus on unlocking excess cash, which could in turn fuel capital investment, wage growth and shareholder returns.

Lazard Asset Management

A weaker dollar, stretched equity valuations, and earnings concentrated in a narrow set of AI-linked tech firms add to the risk of US equity underperformance. With these factors likely to persist through 2026, non-US equities, with lower valuations and broader earnings drivers, appear better positioned for sustained outperformance.

LGIM

Rather than picking today’s best-known AI names and hoping their success continues, investors could instead consider investing in a wide range of companies driving AI adoption across many sectors and geographies, providing much more rounded exposure.

Ned Davis Research

A sanguine macro backdrop supports an overweight to European equities, a cyclical sector tilt and a preference for midcaps. We prefer markets like Spain and Poland to core European markets, given a more benign economic outlook. While positive on the tactical outlook, we remain mindful of the length of the current bull market.

Neuberger Berman

Productivity improvements in the US should drive higher earnings in aggregate, but policy surprises could deliver volatility spikes. In fixed income, we believe that stabilizing term premia can allow investors to capture selective opportunities at the longer end (10 years and beyond) of the curve.

Neuberger Berman

The accelerating AI rollout in more traditional sectors, from health care to financial services, will add efficiencies and enhance margins beyond mega-cap tech, supporting continued broadening of investment and earnings growth. AI will likely drive an extraordinary process of “creative destruction” for companies and industries, requiring selectivity in investment choices.

Northern Trust Asset Management

Strong fundamentals support equities, but stretched valuations and narrow leadership, especially among AI-linked mega-caps, signal a need for greater selectivity. The era of passive beta is giving way to one where quality, value and low-volatility factors can help position portfolios for resilience and long-term success.

Nuveen

US megacap tech companies may have less-than-clear monetization timelines around some aspects of AI profitability, but we think investors will continue to reward AI-related capex spending, which shows no sign of slowing down in the US. Outside of the US, other global equity markets appear cheaper, but we see no catalyst for a leadership shift.

Pictet Asset Management

We think there’s a slightly higher chance – 25% vs 20% – of a market melt-up as there is of a major correction. There remains scope for a final bout of retail euphoria about the AI industry’s prospects that, judging by past episodes, could drive the market higher still. That’s truer still if the Fed is pushed by the US administration to cut interest rates aggressively, flooding the market with liquidity.

Pictet Asset Management

The UK market offers inexpensive protection against stagflation risks and an attractive dividend yield. UK gilts also look attractive as the Bank of England could cut interest rates by more than what’s currently priced in the market in the event of a further economic slowdown. Attractive yields and a clear shift in the direction of fiscal austerity will be clearly supportive.

Pimco

Central banks in emerging markets, having established stronger monetary policy frameworks, now have more flexibility to ease policy and stimulate domestic demand, potentially supporting EM equities. Specifically, we see attractive opportunities in Korea and Taiwan, which offer exposure to the tech sector at cheaper valuations, and China.

Societe Generale

In the UK, tighter fiscal policy is set to limit growth, allowing the Bank of England to ease its restrictive monetary policy. This should improve competitiveness through a weaker pound (we maintain zero exposure to the currency) and offer more support to UK large-cap equities, which we have increased by 1pp to 4%.

State Street

Fueled by transformative AI investment, robust capital spending, and supportive fiscal policies, US equities remain at the forefront of global markets — yet a careful eye on valuation risks is warranted. Diversifying across cyclical, defensive, and secular growth sectors can help investors navigate macroeconomic trends and strengthen portfolio resilience.

State Street

Within Europe, there are opportunities to be selective while focusing on larger secular trends that impact global economic growth, productivity, and fundamental cash flows. Europe’s technology sector is trading above long-term valuation metrics, though it is not at the all-time highs seen in the US. As in the US, utilities present opportunities amid the need to fulfil global AI and data center needs. For industrials, a fiscal impulse will offer support via new defense spending.

Tallbacken Capital

Despite the expected continued risk appetite, we don’t expect equity returns to be as impressive as they have been in the past year, and parts of the credit markets will likely widen – especially those companies exposed to lower income demographics, which are vulnerable to real wages becoming negative.

Tallbacken Capital

AI gains will not hit all parts of the economy – and all people – equally. Further, the Fed cutting into ~2% GDP, ~3% inflation, and strong earnings growth will have the effect of further exacerbating the wealth effect. You need to own inflationary assets (e.g. real estate and equities) in an environment with strong structural inflationary factors and potential upside risk from monetary policy.

Tallbacken Capital

Our year-end price target for the SPX is 7,400. The SPX is currently trading at elevated valuations at the higher end of it’s long term trend channel. This means some consolidation should be expected at some point, perhaps in the mid to late winter.

Tallbacken Capital

The “everything else” part of the stock market is very expensive – and will need to see stronger than expected earnings growth to see the rotation trade to outperform.

Truist Wealth

Emerging markets are also on our radar as an early-year upgrade candidate, given tentative signs of stabilizing earnings trends and the ongoing strategic AI competition with the US.

Wells Fargo Investment Institute

Cybersecurity as a rising national-security priority looks to us like another durable trend, and investors could look to the systems software subgroup under the software subsector for companies that are tackling this technology project.

Wells Fargo Investment Institute

We maintain our home-country bias with a preference for US equities and fixed income. However, given our expectations for easing global inflation and lower short-term US interest rates, it follows that the dollar should remain stable and thereby could support further lower borrowing costs in emerging markets.

Wells Fargo Investment Institute

Increased defense spending and infrastructure rebuilding in European nations like Germany, coupled with less disruptive tariff impacts than we previously anticipated, support our preference for a full international equity allocation.

Allspring Global Investments

Emerging makets remain meaningfully under-owned and undervalued relative to their weight in the global economy.

Amundi Investment Institute

We are overall neutral on US equities.

Amundi Investment Institute

We seek opportunities in the expanding Asian tech ecosystem. Japan can also benefit from the corporate reform and weaker Yen.

Apollo Global Management

The forward-looking view of the consensus is that AI will continue to drive the performance of the S&P 500 in 2026. Investing in the S&P 500 today means largely investing in AI. In other words, the index no longer offers the diversification it once did.

Barclays Private Bank

Equity indices have become unusually dependent on a few large companies, amplifying sensitivity to stock-specific news and heightening the risk of index-level volatility if these leaders de-rate. We continue to recommend diversifying beyond US mega caps, where valuations and concentration are most extreme.

Barclays Private Bank

After lagging during the AI-led rally, quality is well positioned to regain leadership as volatility rises and fundamentals regain focus. As growth slows and bond yields decline, defensive sectors like health care, staples and utilities tend to outperform their cyclical peers. This suggests scope for a rotation back into defensives in 2026.

BlackRock Investment Institute

We stay selective in European equities, favoring financials, utilities and health care.

BNP Paribas Asset Management

Equity markets continue to be technology driven, with US technology company earnings expected to grow robustly as AI fuels capital expenditure and productivity gains.

Charles Schwab

We believe the US macro environment will continue to be unstable given policy crosscurrents and a wobbly labor market, but stocks can likely churn higher given a firmer earnings backdrop.

Comerica Wealth Management

Artificial intelligence continues to be a transformative force, driving productivity gains across industries. Despite the enormous cash flow margin advantage, technology valuations are elevated, warranting cautious investment as we have been in a record momentum-driven market with controversy brewing around valuations, retail and high-frequency trading, and debt financing.

DWS

Europe also offers earnings growth, and Germany stands out with infrastructure and defense investments.

Fidelity International

AI will be the defining theme for equity markets in 2026. It should continue to propel stocks forward, and there is real substance to the underlying technology even as questions mount over its application. It is wise to understand those risks, and where best to diversify.

Fidelity International

Continue to invest in the AI theme, while also looking to build resilience through income plays and opportunities beyond the US, like Europe, Japan, and China.

Future Standard

Three years into the AI trade, stocks head into a new phase. The S&P 500 has gained more than 80% since ChatGPT’s launch three years ago, with AI-related names driving nearly three-quarters of the return. While the earnings backdrop remains quite healthy overall, surging capex is set to pressure the cash flow generation of many tech giants. This is likely to make for a choppier, less unified AI trade.

Future Standard

The artificial intelligence theme has become so significant, investors should consider ways to ensure diversification between AI builders and AI users. Public markets are concentrated in the former, while private markets offer an opportunity to allocate to the latter at scale.

HSBC

We don’t think the era of "US exceptionalism" is over. Concentration risk, however, should be managed, as US valuations are elevated. While we remain positive on the US, we’ve slightly trimmed our exposure there and increased our geographical diversification.

iCapital Research

Financing and depreciation schedules in AI could pressure earnings and valuations. While we should gain more clarity on these topics next year, it will be important for investors to be selective in their approach to the AI theme in 2026.

JPMorgan Asset Management

Investors should ensure their portfolios are not overly concentrated in US tech, even if the US rally could successfully extend into 2026.

NatWest

Fundamentals, not speculation, have been powering investment performance. And as long as that continues, we remain comfortable maintaining our exposure to equities.

Ned Davis Research

Our regional equity positioning includes overweight allocation to emerging markets and underweight allocation to the US, positions likely to remain intact.

Pimco

With high valuations concentrated among a small number of companies, it’s not difficult to find attractively valued stocks with desirable characteristics such as robust balance sheets and healthy growth. Consider tilting toward undervalued sectors rather than chasing the most expensive parts of the market.

State Street

We stay constructive on equities and maintain a slight preference for US stocks, while recognizing that valuations are rich and market concentration remains a concern — underlining the importance of being selective in exposures. Higher volatility is likely to return at some point, along with the possibility of market adjustments, but these should be short-lived and overall we remain upbeat for 2026.

State Street

Fiscal and policy developments create a risk that dollar weakness may offset gains from US equity holdings for international investors — selective hedging of dollar exposure is worthy of consideration to help preserve portfolio returns.

Tallbacken Capital

We expect rate volatility to remain lower but equity volatility to range higher. Our lower rate volatility call is primarily a function of the expected range of moments in Fed policy being relatively contained. At the same time, equities may still range much higher with a VIX entering a higher, more dynamic range. This higher equity volatility view does not mean equities are entering a bear trend.

Tallbacken Capital

We suspect the Mag Seven will continue to have strong earnings and operating and net income margins in 2026-7. However, these same companies are going through an unprecedented pivot in their free cash flow profile, while their free cash flow yields are already at record lows. If there are indications that the AI spend will not translate into compelling ROIC, we should expect a substantial re-rate in their discount rates and multiples. The “Oracle dark cloud” may continue to hover until we see clarity on long-term revenue and earnings growth pick up.

Tallbacken Capital

In an environment defined by re-engineering global supply chains and the massive implications of AI, scale is needed. Larger companies will, by and large, outperform smaller companies. Obviously, there will be many compelling specific investments in small caps. Some of that specific company outperformance may come from M&A as companies seek scale.

Barclays Private Bank

The pace of new AI commitments is likely to slow and the focus will shift to delivering on the announced projects. This may still translate into solid GDP growth but may not support equity markets as much.

Brandywine Global

We believe that economic momentum is likely to pick up somewhat, which combined with interest rate cuts, is more likely to cause market performance to broaden out relative to the past few years. This shift should, generally, be good for small- and mid-cap companies and value stocks on a relative basis. The underperformance of low-beta stocks, which now tend to be more in the value universe, may also reverse as investors rotate their exposures.

Charles Schwab

In part due to the expectation of a widening-out in terms of the AI theme, we expect ongoing rotations in 2026, but with greater participation under the surface of the capitalization-weighted indexes.

Evercore ISI

Strong equity price momentum over the past three years coupled with promise of technological progress similar to prior tech revolutions could cause wide upside/downside swing to our S&P 500 7,750 base case scenario. Our bull case S&P 500 at 9,000 by year end is predicated on a bubble forming in 2026. Our bear case S&P 500 5,000 by year end 2026 implies the bubble deflates as sticky inflation, weak growth, moderating capex accentuate downside in an historically expensive equity market that is priced to perfection.

Ned Davis Research

Cycles indicate headwinds as equity advance becomes more mature. Extreme valuations threaten longevity of cyclical and secular bull markets.

Brandywine Global

The year leading up to the midterms is often a year of underperformance, and we believe that political puts and takes will be a larger driver of returns in 2026.

Societe Generale

We increase our equity holdings by 5 points to 55%, broadly diversified across geographies except for Japan. This move is also supported by the onset of a new releveraging cycle driven by M&A activity (credit rating downgrades in the pipeline), which leads us to downgrade corporate bonds by a further 5 points to 5%.

Societe Generale

Emerging market (EM) assets should continue to enjoy a goldilocks environment, driven by sound macroeconomic policies that prioritize low inflation and debt sustainability over growth. As a result, we increase our allocation to EM bonds by an additional 3 points to 10%, and to EM equities—divided between global exposure, which rises by 3 points to 6%, and direct China exposure, which is up by 1 point to 4%.

UniCredit

Fixed income faces headwinds from heavy sovereign issuance and gradual central-bank easing, keeping yields elevated. The 10-year Treasury is seen at 4.3% and Bunds at 2.9% by year-end.

Bank of America

Treasury yields could surprise to the downside in 2026. We expect the 10-year to end 2026 at 4-4.25% with risks to the downside. Our US economists expect the Fed to cut rates by 25 basis points at the December 2025 meeting and twice in 2026 (June and July).

BCA Research

We recommend positioning for a bull-steepening of the US Treasury curve on a six-to-12 month investment horizon. We also recommend overweighting government bonds within a fixed-income portfolio (versus investment- and speculative-grade corporate bonds).

Bel Air Investment Advisors

We view the 10-year Treasury yield at approximately 4.2% as close to fair value, as the 10-year typically prices about 100 basis points above the terminal federal funds rate. The projected terminal rate is approximately 3.125%. We anticipate heightened volatility when the new Fed Chair begins in May and around the midterm elections.

Bel Air Investment Advisors

We are buyers of longer-duration municipal bonds to take advantage of the steep municipal yield curve. The large issuance calendar should provide ample opportunities to purchase bonds at attractive tax-free rates.

Carmignac

In fixed income and currencies, long-dated government bonds from high-deficit issuers look unattractive, while inflation-linked bonds, high-quality credit, and commodity-supported or fiscally disciplined currencies offer a better risk-reward.

Columbia Threadneedle

In our base case scenario, with 10-year Treasury yields around 4% and investment-grade credit yielding near 5%, bonds present a compelling value proposition, especially with inflation at around 3%. In this environment, investors should prioritize sectors offering higher yield per unit of duration.

DWS

For bonds, the motto is “carry-on” — capturing high running yields. Modest growth, falling inflation, and supportive central banks could create an almost ideal backdrop for bonds, if not for rising government debt, already visible in 30-year maturities.

DWS

In the US, the end of quantitative tightening and planned buybacks reduce supply and support intermediate maturities. We expect 10-year yields between 3.75% and 4.25%.

DWS

In Europe, Bund yields should remain stable over the next 12 months, with potential curve steepening at ultra-long maturities due to financing needs and pension reform in the Netherlands. Given unattractive foreign exchange hedging costs, euro investors are likely to stay “at home.”

Franklin Templeton

Yield curves look poised to steepen, and the US dollar will remain weak.

Goldman Sachs

For bonds, higher growth and lower inflation push in opposite directions. We expect yields to remain more range-bound in our baseline forecast as a result.

HSBC

We’ve equipped our multi-asset portfolios with quality bonds to secure a stable income stream, regardless of the form that uncertainty takes.

HSBC

Against a backdrop of still-sticky inflation and resilient economic activity, the Fed may cut less than markets expect, limiting further downside in US Treasury yields. Therefore, we’ve reduced our preferred duration for exposure to five-to-seven years to reflect the risk of increasing volatility in longer-dated bonds.

JPMorgan Chase & Co.

DM yields are forecast to grind higher over the course of 2026. 10-year Treasuries, 10-year Bunds and 10-year gilts could reach 4.35%, 2.75% and 4.75% respectively by the fourth quarter, with mixed curve performance. We remain bearish on Japanese government bonds and expects broad bear-flattening dynamic.

JPMorgan Wealth Management

Aggregate bonds are our preferred buffer against a recession or growth slowdown, and we expect most categories of fixed income to deliver mid-single-digit total returns over the next year. We think the US municipal bond market is compensating investors for the risk of stickier inflation.

LGIM

With yields well above post-global financial crisis averages, and the US policy rate generally viewed as modestly restrictive, we believe short-dated Treasuries can serve as an effective hedge should risk assets come under duress and/or the economy tip into recession.

Lombard Odier

Developed market sovereign bonds should underperform those in emerging markets. We still expect a disinflationary trend across economies in 2026, but we do not expect the yields on long-dated developed market sovereign bonds to fall far given debt and fiscal concerns.

LPL Financial

Bonds continue to offer compelling income opportunities, with starting yields still elevated relative to historical norms. With 10-year Treasury yields anticipated to remain between 3.75–4.25% in 2026, investors should focus on income generation rather than price appreciation. As the Fed lowers short-term interest rates, returns on cash will continue to decline, making high-quality bonds with intermediate-term maturities more attractive for long-term investors.

Morgan Stanley

Government bonds — particularly in the US — are likely to rally in the first half of the year as central banks shift from inflation control to policy normalization but decline in the second half.

Morgan Stanley

The yield on the 10-year Treasury is expected to decline into midyear as the Fed lowers rates, before rebounding just above 4% at yearend. Yield curves in the euro zone and the UK are also likely to steepen, although less dramatically than in the US.

Neuberger Berman

European equities are likely to face pressure on falling earnings expectations and a more challenging macro/policy backdrop; European fixed income (Bunds, corporate credit) looks attractive ahead of additional monetary easing.

Nuveen

As supply eases and demand rises, supportive interest rates and strong fundamentals could continue to power municipal bonds forward. With municipal yield curves steeper than Treasuries, investors may be well compensated for duration risk. We see compelling opportunities across both high grade and high yield municipals. We favor select opportunities in health care and higher education and believe the 7-to-11 year duration range offers value.

Nuveen

US Treasuries offer poor value at this point. We expect long-term rates to remain range-bound even as short-term rates decline. If the Fed cuts less aggressively than markets expect, Treasuries could face trouble. We advocate maintaining neutral duration while identifying attractive credit opportunities.

Pictet Asset Management

The case for increasing allocations to developed market bonds isn’t particularly strong. We expect yields on most developed market sovereign bonds to rise moderately in 2026, with markets likely to be volatile as the Fed looks set to deliver fewer cuts than anticipated. US benchmark 10-year yields are likely to end the year at around 4.25%, slightly higher than current levels but roughly in line with potential nominal GDP growth. In this environment, we think Treasury Inflation-Protected Securities (TIPS) will continue to outperform.

Pimco

Consider rotating from cash into high-quality bonds for the potential to lock in yields and position for capital appreciation as interest rates decline. We favor two- to five-year bond maturities.

Robeco

Our 10-year Treasury fair model sees nominal yields upward of 4.5%, signaling downside risks. While nominal yields might end 2026 higher compared to today’s 4% level, real yields could see downward pressure. With Trump loyalists at the Fed gaining influence in 2026, we expect a notable decline in real yields.

Russell Investments

Based on current sentiment levels, we believe equities may outperform bonds over the next 12 months. We believe retail and institutional investors should stay invested with risk levels up near strategic targets.

Russell Investments

We see value on both sides of the fixed income spectrum. Public markets provide fair-valued duration and liquidity as policy easing unfolds, while private markets deliver yield, diversification, and access to real-economy assets.

Schroders

After a period of outperformance for US bonds, we are seeing better opportunities emerge for global portfolios. We also believe having inexpensive inflation protection is prudent given a strong growth outlook, dovish policymaking and the ongoing threat of weakened credibility of the Fed with the end of Jerome Powell’s term in May 2026 and the appointment of a new Chairperson. In Europe, we’re finding good opportunities in quasi-sovereign and covered bond issuers.

State Street

For emerging markets, we hold a broadly constructive outlook heading into 2026 as AI-driven global growth, loose liquidity, and a weak US dollar act as tailwinds. We retain a positive outlook on emerging market debt, with a slight preference for local currency bonds.

T. Rowe Price

Inflation protected bonds in the US as well as some European countries and Japan represent attractive value, with those markets underpricing our anticipated inflation. We’re seeing select opportunities in emerging market nominal government bonds — the Czech Republic, Thailand, and Latin American nations like Brazil and Chile.

Truist Wealth

Within fixed income, we stay focused on high quality, awaiting a better opportunity to upgrade our view of credit. Longer-term yields should move lower, though fiscal and trade policy concerns will likely keep them relatively sticky, contributing to a steeper curve. We anticipate the 10-year Treasury yield drifting toward 3.75% by year-end.

Truist Wealth

Municipals offer productive yields and sturdy underlying credit fundamentals despite heavy issuance, while preferreds provide attractive income but carry longer duration and sector concentration risks.

Vanguard

We maintain our secular view that high-quality bonds (both taxable and municipal) offer compelling real returns given higher neutral rates. Returns should average near current portfolio income levels, a comfortable margin over the rate of expected future inflation. That’s the primary reason why bonds are back, regardless of what central banks do in 2026. Importantly, US fixed income should also provide diversification in a world where AI disappoints leading to lower growth.

Wells Fargo Investment Institute

Yield should remain the central goal for investors in 2026, and credit quality the key metric to watch, as earnings durability and continued capital-market access likely drive strong investment-grade and high-yield corporate issuer performance.

Amundi Investment Institute

In Fixed Income, the current backdrop calls for a tactical approach to duration and a neutral-to-slightly-short stance on sovereigns. Quality credit becomes a core allocation for fixed income investors to diversify away from Treasuries, and it is clearly overweight. We remain cautious on US High Yield and Japanese government bonds.

Amundi Investment Institute

A positive stance on European bonds remains a key call for 2026, with a focus on peripheral bonds and short maturities, UK Gilts and investment grade credit, particularly in financials. Sticky inflation calls for seeking opportunities in inflation break-evens.

Amundi Investment Institute

EM bonds stand out for high income and diversification. We like attractive yields in hard currency debt. In local currency debt, we favour Central and Eastern Europe, selective parts of LatAm (Columbia, Brazil) and Asia (India, Philippines and Korea) for carry and valuation. We are positive on EM equities and see notable pockets of opportunities favoring value and momentum styles in LatAm and Eastern Europe and selectively in Asia, in sectors linked to digital assets.

Barclays Private Bank

The outlook for bonds in 2026 remains broadly constructive. Yields – both nominal and real (inflation adjusted) – are well above their 20-year averages, providing a strong starting point for performance. Key macro drivers should support bond market performance in 2026.

BlackRock Investment Institute

We like EM hard currency debt tactically given attractive income, limited issuance and stronger sovereign balance sheets. On a long-term horizon, we favor EM equities at the cross current of mega forces, like India.

BNP Paribas

Long-end yields will rise (steepening curves) despite a moderate drop in net G4 issuance; significant increases in German supply leave us most bearish on core European duration. We are selectively bullish EM rates.

BNP Paribas Asset Management

Fixed income markets are poised to benefit from ongoing central bank easing in 2026, with lower interest rates anticipated in the US and Europe. While sovereign debt yields may face upward pressure from rising government deficits, the environment remains supportive for credit markets.

BNY

Global fixed income fundamentals remain strong. Stable US credit spreads create potential opportunities for shorter-duration Treasuries and investment grade credit. In Europe, country-level dynamics continue to drive relative valuations.

Brandywine Global

We still expect the gilt market to outperform broader DM Europe as the UK has started the process of fiscal retrenchment when other European governments are still favoring fiscal expansion.

Capital Group

High-quality bonds are regaining their traditional role as a source of income and portfolio stability. With economic growth prospects improving but labor markets showing signs of weakness, bonds may offer valuable downside protection amid ongoing uncertainty.

Citi

Specific hedges like credit underweights and favorable fixed income positions (e.g., gilts) for risk management.

Citi

We are in the relative-value space but overall neutral duration, given various push and pull factors until the fog clears. We remain neutral in Treasuries. We are overweight EM local and Gilts, and underweight JGBs and OATs.

Comerica Wealth Management

Fixed income markets offer attractive income opportunities amid a backdrop in moderating interest rate cuts. Municipal bonds provide tax-advantaged income and stability, while global bonds offer further diversification benefits. Investors should be mindful of duration risk and credit quality in their fixed income allocations and wary of extremely tight credit spreads.

Fidelity International

Macro drivers are likely to see interest grow in Asia local currency bonds. Asia high yield bonds look compelling with a more balanced pool of issuers.

Fidelity International

The depreciation of the dollar should continue to support EM local currency bonds; we target markets where elevated real yields offer attractive valuations.

Goldman Sachs

While total returns on government bonds may be mostly about earning the yield, bonds are likely to be an effective hedge against the largest risks to equities (a recession or a reversal of AI optimism), particularly at shorter maturities.

HSBC

We prefer global investment grade credit for its still attractive yields and diversification benefits, while remaining cautious on high yield bonds given tightening spreads and a relatively fragile risk environment. We favor EM local currency government bonds.

iCapital Research

While we still see the 10-year Treasury trading in a range, at least to start 2026, 4.5% could be in play if the outlook for the deficit worsens. Such a move could put pressure on risk assets and capital market activity.

JPMorgan Asset Management

To protect against a fall in tech stocks, investors should consider high-quality, long-duration bonds and defensive equity sectors. To protect against inflation risk, investors should allocate adequately towards alternative assets, which should support a portfolio whether inflation is acute or chronic.

Lazard Asset Management

Debt sustainability concerns limit the appeal of many other developed market bonds. By contrast, in many cases, local currency EM debt stands out for more conservative fiscal policy, orthodox monetary management, and FX appreciation potential.

LGIM

While fears over government debt and expansionary monetary policies eroding the purchasing power of fiat currency are not without merit, we still see a place for US Treasuries.

LGIM

With resilient growth across emerging markets, upward revisions to forecasts, declining inflation, and a robust external sector, we maintain a constructive stance on emerging market debt.

LPL Financial

We don’t think right now is a good time to overweight or underweight duration (interest rate sensitivity) in fixed income portfolios. A neutral duration relative to benchmarks is, in our view, still appropriate. And, for those investors who want to own bonds for income, the belly of the curve (out to 5-years) remains attractive.

LPL Financial

Importantly, as the Fed continues to cut short-term interest rates, cash yields will come down as well, which should allow high-quality fixed income markets to outperform cash holdings once again.

Ned Davis Research

We favor bonds over cash in our global and Europe allocations. Benign long-term inflation expectations should help bonds, although the reduced volatility will leave the developed bond markets vulnerable to shocks.

Neuberger Berman

Productivity improvements in the US should drive higher earnings in aggregate, but policy surprises could deliver volatility spikes. In fixed income, we believe that stabilizing term premia can allow investors to capture selective opportunities at the longer end (10 years and beyond) of the curve.

Neuberger Berman

In the US and Europe, improving carry profiles in longer maturities on the back of lower policy rates should provide support to the long end of yield curves. Consider increasing exposure to longer duration bonds for potentially higher yield and return generation during periods of mispricing.

Northern Trust Asset Management

Inflation is expected to remain above average at about 3%, with tail risks of it running hotter than market expectations. TIPS offer a compelling hedge, especially as breakeven rates lag behind current inflation trends.

Northern Trust Asset Management

Relying solely on US Treasuries for portfolio diversification is a relic of the past decade. Global government bonds can provide diversification and a currency tailwind amid pressure on the US dollar.

Pictet Asset Management

The long bear market in bonds looks to be over, although there’s the possibility of some upward pressure on yields in the US, euro zone and UK where core inflation seems to have settled a bit above central banks’ target. US Treasury bonds are undoubtedly still a core holding for investors, but they are also vulnerable to a negative shock if US inflation does heat up on the back of tariffs, tight labor market and fiscal stimulus. We expect investors to continue to hedge against accidents with gold, though the steep run-up in the precious metal has prompted us to pare back our positioning somewhat.

Pictet Asset Management

The UK market offers inexpensive protection against stagflation risks and an attractive dividend yield. UK gilts also look attractive as the Bank of England could cut interest rates by more than what’s currently priced in the market in the event of a further economic slowdown. Attractive yields and a clear shift in the direction of fiscal austerity will be clearly supportive.

Pimco

At today’s yields, high quality bonds look attractive across many possible economic scenarios. With inflation having moved back toward central bank targets, bonds again provide opportunities for diversification through their traditional negative correlation to stocks, helping portfolios weather equity downturns.

Pimco

Investors can also take advantage of today’s abundance of global fixed income opportunities, with attractive real and nominal yields available in countries across developed and emerging markets, such as the UK, Australia, Peru, and South Africa. We believe diversification across regions and currencies is an effective way to harvest differentiated sources of return while fortifying portfolios.

Russell Investments

US Treasuries trade near our estimates of fair value across the curve, supporting a strategic allocation to duration in fixed income and multi-asset portfolios. At the same time, public market credit spreads are historically tight with specialist managers finding opportunities to rotate exposure into equities, securitized credit, and private market debt — which continues to trade at a substantial yield advantage to public markets.

Schroders

Emerging market debt offers better dynamics and higher real yields than developed market debt. There are also opportunities to generate income from diversifying investments such as insurance-linked securities and infrastructure debt. Liquid hedge fund strategies could also offer a means of increasing diversification whilst remaining invested.

Schroders

The broader US fixed income market continues to offer an attractive prospective return profile, especially as we look toward 2026. We see value in increasing exposures to high-quality duration assets such as tax-exempt municipals and securitized instruments, while avoiding generic credit beta that no longer offers sufficient spread premium. Investors do not need to stretch for incremental income.

Societe Generale

We cut our disappointing exposure to US inflation-linked bonds by 5 points, bringing it down to zero, and switch that into US Treasuries

State Street

Heading into 2026, we continue to hold a constructive view on prospects for much of the fixed income market, with a general preference for sovereign debt over corporate bonds given tight spreads, the policy backdrop, and ongoing concerns that additional shocks may surface.

T. Rowe Price

We anticipate there will be selective opportunities in credit, but expansionary fiscal policy will drive longer‑maturity government bond yields higher.

T. Rowe Price

We favor taking some currency risk in fixed income through locally denominated international developed market and emerging market bonds.

Wells Fargo Investment Institute

We maintain our home-country bias with a preference for US equities and fixed income. However, given our expectations for easing global inflation and lower short-term US interest rates, it follows that the dollar should remain stable and thereby could support further lower borrowing costs in emerging markets.

Allspring Global Investments

Bonds continue to offer real value. Nominal yields are high by historical standards; real yields remain firmly positive; and, looking ahead, we expect income generation to be the primary driver of total returns. The key will be capturing that income while managing duration and preparing for risks that lie ahead.

Allspring Global Investments

US municipal bonds may offer some of the best relative value. Taxable municipal bonds often yield on par with BBB corporates but may carry stronger credit profiles, while tax-exempt municipal bonds look especially attractive for high-tax investors.

BlackRock Investment Institute

In fixed income, we prefer EM due to improved economic resilience and disciplined fiscal and monetary policy.

BlackRock Investment Institute

We suggest looking for a “plan B” portfolio hedge as long-dated Treasuries no longer provide portfolio ballast – and to mind potential sentiment shifts. We like gold as a tactical play with idiosyncratic drivers but don’t see it as a long-term portfolio hedge.

BNP Paribas

Markets are likely to remain in the "expansion" regime of our framework, which tends to be pro-risk, bearish duration and dollar-negative.

Brandywine Global

We are not going into early 2026 with a pound-the-table level of conviction regarding developed market bonds. Yield (income) over duration (capital gains) should be the driver of total return in DM fixed income. Relative value trades will be the way to make outsized returns.

Brandywine Global

Euro zone yields are likely to drift higher as the economy benefits from the lagged impact of substantial European Central Bank easing and the large multi-year German fiscal stimulus package.

Capital Economics

We suspect that a combination of central bank rate cuts and a subtle increase in financial repression will keep government bond markets broadly anchored. But short, sharp sell-offs triggered by fiscal worries – similar to those seen in France, the UK and the US this year – are likely to be repeated at points in 2026.

Columbia Threadneedle

The fixed-income playbook requires locking in yield and managing duration, while staying vigilant on credit quality.

Deutsche Bank

Normalization of the US yield curve likely to persist. Ten-year Bunds and Treasuries to offer positive real returns. Pay attention to the quality and size of corporate issuers.

Evercore ISI

When we think about the elements that could derail our bullish 7,750 S&P 500 call for next year, higher long term yields move to the center of the argument. Interest rate hedges are cheap, particularly as a proxy for equity market hedges.

Fidelity International

Look for quality in fixed income to offset dispersion and tight spreads. Review emerging market debt for selective risk. Consider duration but be mindful of sticky inflation hindering the Fed’s easing path.

Future Standard

Fixed income faces risks on multiple fronts. The Fed has lowered short-term interest rates substantially over the past 15 months. Strong growth and the potential for delayed-onset tariff-driven inflation introduce risks to further easing, while a new Fed chair will inject uncertainty into the central bank’s communications and independence. Expect rate volatility and curve steepening.

Goldman Sachs Asset Management

We continue to believe that fixed income offers attractive opportunities to investors from a technical and fundamental perspective. However, the balance of risks is shifting and requires an increasingly dynamic approach to portfolio management.

Janus Henderson

Yield is back. For 2026, investors have a range of fixed income opportunities that can be approached by looking beyond the benchmark from a multi-sector perspective or by using specialists in areas such as securitized with its yield potential and resilience, short duration, or emerging market debt.

Janus Henderson

US rate cuts and subdued inflation should broadly support fixed income, but scrutiny over policy motives will shape yield curve dynamics.

JPMorgan Chase & Co.

In the UK, there is potential for further bouts of increased term premia around fiscal events, with political uncertainty also increasing.

NatWest

Persistent inflation has increased the correlation between equities and bonds, reducing bonds’ defensive qualities. This could very well continue given tariff frictions and robust wage growth across developed markets. One way to potentially address this in portfolios is to invest in so-called "liquid alternatives."

Ned Davis Research

Benign long-term inflation expectations and lower volatility are features of the 2026 fixed income outlook. Look for US outperformance and spread convergence with DMs. We don’t expect the central banks to be a major driver of asset returns in 2026. Yield curves should remain relatively subdued. Credit remains richly valued. European peripheral debt is favored.

Principal Asset Management

A resilient US economy and gradual Fed easing set a cautiously constructive backdrop for fixed income in 2026. A steepening yield curve may offer total return potential, favoring flexible, moderately long duration positioning.

Principal Asset Management

Opportunities in emerging markets and municipal bonds could reward active, regionally nuanced strategies.

State Street

Policy easing by the Fed will anchor short-dated US Treasuries and may help draw yields lower if the jobs market weakens further. We are conscious, however, that US yields are close to the lower end of the range seen over the past twelve months.

State Street

Euro zone government bonds face a similar if slightly more constrained setup to that in the US, given diminished prospects of rate cuts and ongoing fiscal concerns. We expect modest returns unless a more significant slowdown unfolds and unlocks additional ECB policy easing.

Tallbacken Capital

One of the reasons why we expect long-run rates to remain range-bound is the simple premise that if the economy remains in decent shape, the greater the cuts, the greater the term premium. But the opposite is also true: if the Fed cuts just once (or not at all), then the term premium should contract, and yield curves should flatten. Ultimately, this helps narrow the range of back-end yields and helps reduce rate volatility.

UBS

Investors should consider a diversified approach to hedging market risks, including holding adequate liquidity to prevent forced selling, and consider quality bonds and gold for stability. Low volatility periods can be used to lock in gains with structured investments.

Allspring Global Investments

Managing duration will be central to portfolio positioning in 2026. Slowing growth and the potential for additional Fed easing create opportunities to extend into the intermediate part of the curve. Mid-curve exposures, combined with global diversification, may help build resilience and enhance return potential.

Allspring Global Investments

Bonds from developed markets such as the UK, France, and Japan — when swapped into US dollars — may deliver AA-level yields at spreads comparable with BBB corporates.

Brandywine Global

Heading into 2026, we expect developed market yields to remain broadly range-bound. On the one hand, there are several factors that point toward the possibility of acceleration of global growth: reduced tariff drag, supportive fiscal policies in major economies, and favorable financial conditions. However, ongoing weakness in employment growth creates meaningful downside risks and limits the scope for a sustained move higher in yields.

Brandywine Global

For us to get excited about owning Japanese government bonds (JGBs) in 2026, the Bank of Japan must be fully committed to tightening policy rates to a point that breaks the back of inflation in Japan. We are not there yet.

Lazard Asset Management

The biggest US debt market risk is diminished Fed independence, which could undermine inflation-fighting credibility and the dollar.

Macquarie

As interest costs rise and issuance increases, fiscal choices will directly influence bond markets, currency dynamics and risk sentiment, making fiscal trajectories as important as central bank policy for investors in 2026.

BCA Research

We recommend positioning for a bull-steepening of the US Treasury curve on a six-to-12 month investment horizon. We also recommend overweighting government bonds within a fixed-income portfolio (versus investment- and speculative-grade corporate bonds).

BNP Paribas

We see equity markets reaccelerating following the current consolidation phase and remain bullish credit, with key opportunities in the high-yield sector.

Carmignac

In fixed income and currencies, long-dated government bonds from high-deficit issuers look unattractive, while inflation-linked bonds, high-quality credit, and commodity-supported or fiscally disciplined currencies offer a better risk-reward.

Carmignac

The most attractively priced hedges can be found in credit default swaps, the Japanese yen and gold.

Citi

Hedges are likely appropriate in a bubble, and thus, we remain underweight credit (investment grade), even though we don’t see a systemic credit event.

JPMorgan Wealth Management

We also see plenty of opportunity to generate income in the five-to-seven year part of the curve in global investment grade credit. We favor European credit over government debt. Corporate fundamentals look to be on healthier trajectories than many European sovereigns, with corporates offering better diversification, yield potential and insulation from challenging sovereign debt dynamics.

Morgan Stanley

The significant spike in debt issuance by the tech sector should result in wider US investment grade spreads.

Neuberger Berman

European equities are likely to face pressure on falling earnings expectations and a more challenging macro/policy backdrop; European fixed income (Bunds, corporate credit) looks attractive ahead of additional monetary easing.

Robeco

For EM debt, an asset class sitting in between high yield and investment grade, we expect inflows persisting in an environment of monetary easing, a weaker dollar and reasonable carry especially versus developed market investment grade alternatives.

T. Rowe Price

In the fixed income allocation, we view high yield bonds as an attractive, lower‑risk way — relative to equities — to benefit from a strong economy. Overall credit quality in the asset class is the highest in years, and we don’t anticipate any deterioration in its fundamentals in 2026.

Wells Fargo Investment Institute

Yield should remain the central goal for investors in 2026, and credit quality the key metric to watch, as earnings durability and continued capital-market access likely drive strong investment-grade and high-yield corporate issuer performance.

Barclays Private Bank

In credit our preference remains BBB-rated medium-term bonds, while BB-rated debt which provides even higher yields, without being overly leveraged, appears attractive by comparison.

BNP Paribas Asset Management

Fixed income markets are poised to benefit from ongoing central bank easing in 2026, with lower interest rates anticipated in the US and Europe. While sovereign debt yields may face upward pressure from rising government deficits, the environment remains supportive for credit markets.

BNY

Global fixed income fundamentals remain strong. Stable US credit spreads create potential opportunities for shorter-duration Treasuries and investment grade credit. In Europe, country-level dynamics continue to drive relative valuations.

Citi

Specific hedges like credit underweights and favorable fixed income positions (e.g., gilts) for risk management.

Comerica Wealth Management

Fixed income markets offer attractive income opportunities amid a backdrop in moderating interest rate cuts. Municipal bonds provide tax-advantaged income and stability, while global bonds offer further diversification benefits. Investors should be mindful of duration risk and credit quality in their fixed income allocations and wary of extremely tight credit spreads.

DWS

For corporate bonds, we remain neutral on investment grade, as record-low spreads are unlikely to tighten further. We are more cautious on high yield, as tight spreads no longer reflect sector-specific risks.

Fidelity International

Inflation in the US will probably be higher than the market expects in 2026, and this presents opportunities. Credit will prove more popular than sovereign bonds as investors weigh the risks of high government debt.

Goldman Sachs Asset Management

The focus for fixed income is on diversified duration and strategic curve positioning to navigate mixed macro signals. Income opportunities may come in securitized, high yield and emerging market credit.

Goldman Sachs Asset Management

Investors may find opportunities to secure relatively high-income streams across various asset classes such as the securitized space, including AAA-rated tranches of collateralized loan obligations (CLOs) and valuations among the BBB-rated cohorts. Another 2026 income avenue could be high-yield credit. With favorable market dynamics, including firm investor demand and easing financial conditions, this should continue to support primary market activity.

Janus Henderson

We see enormous opportunity in private credit strategies, less in direct lending but very much in asset-backed finance (benefitting from strategic deal structures backed by real world collateral) and emerging market private credit.

JPMorgan Chase & Co.

Across global credit markets, focus is shifting from the macro to the micro, and spreads are expected to widen in 2026. Capex-related issuance across the AI and AI-adjacent ecosystems will take their toll on high-grade spreads, in particular. Plus, M&A and increased leveraged buyout activity will be a factor driving increased issuance across both high-grade and high-yield.

JPMorgan Wealth Management

Even emerging market credit is beginning to look more attractive as the Fed eases policy and the dollar declines, a boon to many of these dollar-linked economies.

LPL Financial

Corporate credit investors should remain vigilant. While yields may appear attractive, spreads remain below longer-term averages and are arguably not providing sufficient compensation to take on emerging credit risks.

LPL Financial

Returns will be income-driven as Treasury yields stay rangebound and credit spreads remain tight; agency MBS and investment-grade corporates should outperform Treasuries, while riskier sectors face limited upside and higher default risk.

LPL Financial

Importantly, as the Fed continues to cut short-term interest rates, cash yields will come down as well, which should allow high-quality fixed income markets to outperform cash holdings once again.

Macquarie

While credit spreads remain tight by historical standards, all-in yields remain high relative to recent history and expectations for healthy total returns should drive demand.

Morgan Stanley

High-yield corporate bonds are likely to outperform investment grade debt given that high-yield is relatively insulated from a spike in AI-related issuance.

Pictet Asset Management

We are also positive on investment grade bonds which have attractive valuations at a time when issuers have the capacity to withstand potential economic shocks thanks to their strong balance sheets and robust earnings. The outlook for US high yield bonds is mixed, however, as they trade at yield spreads that are among the tightest seen in previous business cycles.

Pimco

Amid strains in certain areas, Pimco sees ongoing opportunities in credit markets for investors who can look beyond whether an investment is public or private. In our view, the key is to focus on evaluating liquidity and credit risk across both areas and finding where the potential rewards are greatest. We are seeing opportunities in certain large-scale financings, where competition is limited; in credit linked to lower-risk consumers; and in select real estate lending.

Principal Asset Management

High yield remains compelling, though continued heavy issuance may test market capacity.

Robeco

While technicals remain healthy, investment grade spreads are tight. Our view of long-end yields ending 2026 higher, reinforces a preference for shorter (spread) duration exposure. High yield spreads are historically stretched but financial conditions are still very easy and hint on the possibility of even further compression into 2026. A broadening out of earnings delivery will be helpful in this respect. But with spreads staying well below 500 basis points in 2026 in our view, high yield is unlikely to outperform equities. We therefore see more relative upside in equities if our base case materializes.

Russell Investments

US Treasuries trade near our estimates of fair value across the curve, supporting a strategic allocation to duration in fixed income and multi-asset portfolios. At the same time, public market credit spreads are historically tight with specialist managers finding opportunities to rotate exposure into equities, securitized credit, and private market debt — which continues to trade at a substantial yield advantage to public markets.

Schroders

The broader US fixed income market continues to offer an attractive prospective return profile, especially as we look toward 2026. We see value in increasing exposures to high-quality duration assets such as tax-exempt municipals and securitized instruments, while avoiding generic credit beta that no longer offers sufficient spread premium. Investors do not need to stretch for incremental income.

State Street

Heading into 2026, we continue to hold a constructive view on prospects for much of the fixed income market, with a general preference for sovereign debt over corporate bonds given tight spreads, the policy backdrop, and ongoing concerns that additional shocks may surface.

T. Rowe Price

We anticipate there will be selective opportunities in credit, but expansionary fiscal policy will drive longer‑maturity government bond yields higher.

Tallbacken Capital

Despite the expected continued risk appetite, we don’t expect equity returns to be as impressive as they have been in the past year, and parts of the credit markets will likely widen – especially those companies exposed to lower income demographics, which are vulnerable to real wages becoming negative.

BNP Paribas Asset Management

Key themes for 2026 include the need for flexibility in fixed income strategies, as investors navigate economic growth challenges and an uncertain inflation outlook. We believe opportunities exist across defensive sectors, real estate, and high yield, but a nimble approach is required.

Columbia Threadneedle

The fixed-income playbook requires locking in yield and managing duration, while staying vigilant on credit quality.

Deutsche Bank

Alongside equities, corporate bonds may be attractive – depending on your risk appetite, both investment-grade and high-yield segments.

Deutsche Bank

Normalization of the US yield curve likely to persist. Ten-year Bunds and Treasuries to offer positive real returns. Pay attention to the quality and size of corporate issuers.

Evercore ISI

For the credit markets, the combination of the proliferation of private credit, and the associated headlines and strains in private credit lenders and businesses in recent months which comes with a rise in bankruptcy filings at a minimum imply that “attention must be paid” for further signs of deterioration and larger systemic spillovers.

Goldman Sachs

The risk-reward in credit looks less appealing. Valuations provide a clearer cap on the upside—at least for investment grade bonds. We think releveraging and the increasing issuance demands from the AI boom are likely to lead to at least some modest widening of spreads that limit total returns even in our central case.

Goldman Sachs Asset Management

We continue to believe that fixed income offers attractive opportunities to investors from a technical and fundamental perspective. However, the balance of risks is shifting and requires an increasingly dynamic approach to portfolio management.

Janus Henderson

Yield is back. For 2026, investors have a range of fixed income opportunities that can be approached by looking beyond the benchmark from a multi-sector perspective or by using specialists in areas such as securitized with its yield potential and resilience, short duration, or emerging market debt.

Janus Henderson

We think corporate bond yields remain attractive, but investors should monitor historically tight credit spreads and the impact of increased AI-driven debt issuance on supply dynamics.

Ned Davis Research

Benign long-term inflation expectations and lower volatility are features of the 2026 fixed income outlook. Look for US outperformance and spread convergence with DMs. We don’t expect the central banks to be a major driver of asset returns in 2026. Yield curves should remain relatively subdued. Credit remains richly valued. European peripheral debt is favored.

Principal Asset Management

Investment-grade credit is supported by solid fundamentals, but tighter spreads and rising supply require selectivity.

Schroders

Corporate bonds have enjoyed another year of positive performance, but we see the valuation starting point as the key driver of forward-looking returns. The spread earned for taking additional credit risk over government bonds is now at historically low levels. With these very tight spread levels, having significant exposure here seems unwise currently. Opportunities to add risk in credit will present themselves in 2026.

Tallbacken Capital

We expect rate volatility to remain lower but equity volatility to range higher. Our lower rate volatility call is primarily a function of the expected range of moments in Fed policy being relatively contained. At the same time, equities may still range much higher with a VIX entering a higher, more dynamic range. This higher equity volatility view does not mean equities are entering a bear trend.

Brandywine Global

Valuations in investment-grade credit remain far from compelling. After years of yield-seeking flows—particularly from insurance and liability-matching buyers—spreads remain near cycle tights. But beneath the surface, the market continues to offer pockets of opportunity. Companies with improving balance sheets, deleveraging stories, and idiosyncratic catalysts can still deliver attractive relative value, even if the overall index struggles to re-rate tighter.

Capital Group

Credit sectors continue to benefit from supportive yields and pro-growth policies. As interest rate cuts progress, active management and thoughtful security selection remain essential for capturing opportunities and managing risk across fixed income markets.

Apollo Global Management

Larger companies appear to have found their footing after an uncertain start to 2025. This is an important signal of strength heading into the new year, with impacts for credit markets and the overall economy.

JPMorgan Chase & Co.

We maintain our Brent price forecast of $58 in 2026 and introduce our 2027 forecast of $57, while recognizing that considerable effort will be required to stabilize prices at these levels. We remain bullish on gold on the back of boosted central bank buying and robust investor demand. Gold prices are expected to soar to $5,000 per ounce by the fourth quarter of 2026, averaging $4,753 for the full year.

BCA Research

We have a negative view toward cyclically-sensitive commodities over the coming year. The majority of BCA strategists remain overweight gold.

BNP Paribas

We forecast Brent crude to fall to an average of $55 per barrel in the first quarter before bouncing back.

Carmignac

The most attractively priced hedges can be found in credit default swaps, the Japanese yen and gold.

Citi

In commodities, we are overweight. We remain long base metals, and neutral on precious metals and energy given decent global data momentum.

Fidelity International

Gold, absolute return strategies, and private assets should provide diversified resilience for portfolios in the year ahead.

HSBC

Gold's uptrend, though slowing, will continue to benefit from strong central bank demand, concerns about dollar debasement, and steady inflows into gold ETFs. As such, gold’s role as a key diversifier remains firmly in place.

LPL Financial

We expect precious metals to continue outperforming. Recent selling pressure in the space does not change its constructive macro backdrop. Oil markets remain weak due to well-telegraphed supply concerns. Better-than-feared economic activity, easing trade tensions, and reduced OPEC+ production could help drive a rebound.

Morgan Stanley

Gold is expected to remain strong in 2026 after repeatedly hitting record highs this year. Continued physical demand and rate cuts should support prices.

Morgan Stanley

Among base metals, copper and aluminum are Morgan Stanley’s top picks, with both facing supply constraints.

Morgan Stanley

Brent crude is likely to hover around $60 per barrel, with risks stemming from weak demand and rising supply from OPEC and non-OPEC producers. Geopolitical and logistical factors may offer some price support.

Pictet Asset Management

Gold remains a strategic safe-haven asset, and we have consequently chosen to keep an overweight position in the precious metal of up to 5% in our multi-asset portfolios.

Societe Generale

Retail investors have continued to diversify their assets and pile into gold, through bars, coins and ETFs. We recommend buying the dips as non-aligned central banks will continue to diversify away from dollar assets and because gold offers efficient protection against many risks (including a more dovish Fed after the change in top personnel).

UBS

Supply constraints, rising demand, geopolitical risks, and long-term trends like the global energy transition should support commodities. Within this asset class, particular opportunities exist in copper, aluminum, and agricultural commodities, while gold serves as a valuable diversifier.

UniCredit

Currency markets anticipate a gentler decline in the dollar, while commodities remain subdued, with oil under pressure and gold supported by long-term safe-haven drivers. Oil prices subdued at $60-65 per barrel, while gold remains supported at $4,100-$4,400 per ouce.

DWS

We remain broadly diversified and see gold as a relative hedge.

Evercore ISI

While the “pop” at the gold top may not have been a bubble burst on the order of 1980, we expect gold, particularly in light of its inability to rally alongside silver, to enter a period of wide ranging frustration, testing the patience of bulls and bears alike.

JPMorgan Wealth Management

In energy assets, we are focused on liquefied natural gas, renewables and grid modernization.

JPMorgan Wealth Management

Investors should be mindful of higher inflation, shifting trade patterns and the potential for increased market volatility. If geopolitical risk and currency volatility increase in a fragmented world – and we think they will – gold and energy commodities can serve as valuable hedges.

JPMorgan Wealth Management

Given the potential for a stickier and more volatile inflation environment, we believe investors should focus on assets that have a lower volatility compared with equity but a positive correlation to inflation. Based on historical examples, gold and diversified hedge fund strategies provide the most encouraging results.

Lazard Asset Management

Gold, while lacking cash flow, could also continue to serve as tail risk insurance in an environment of reduced dollar exposure and rising central bank demand.

Morgan Stanley

In agriculture, soy and corn prices could rise due to adverse weather and tighter credit conditions in Brazil, a leading global producer.

Ned Davis Research

The subdued global growth environment supports a muted outlook for broad commodity returns, but precious metals should outperform. We are bullish on gold and bearish on the US Dollar Index.

Pictet Asset Management

The long bear market in bonds looks to be over, although there’s the possibility of some upward pressure on yields in the US, euro zone and UK where core inflation seems to have settled a bit above central banks’ target. US Treasury bonds are undoubtedly still a core holding for investors, but they are also vulnerable to a negative shock if US inflation does heat up on the back of tariffs, tight labor market and fiscal stimulus. We expect investors to continue to hedge against accidents with gold, though the steep run-up in the precious metal has prompted us to pare back our positioning somewhat.

Pimco

We see structural support for gold demand. A potential gold price increase of more than 10% over the next year is feasible, in our view. However, short-term retracements are possible.

Pimco

Consider modest, diversified allocations across gold and broad commodities for the potential to enhance portfolio resilience and inflation protection without overconcentrating in any single theme. Broad commodities can also provide a potential alternative way to play the AI investment theme, as infrastructure needs drive demand for inputs such as copper, lithium, and energy as well as strategic assets like rare earths.

Robeco

Industrial metals could start to outperform gold once the global manufacturing cycle starts to improve. Gold still has secular upside as gold miner capex is not overextended and worries about Fed independence and sticky inflation flare up in 2026. Capping upside for gold in 2026 are a disappointing number of Fed cuts and our synchronized shift in real activity alleviating fears about stagflation.

State Street

As we have seen, gold and other commodities, income-generating assets, real assets, and private markets have all benefited from investors adopting a broader approach. There is room for broader adoption, risk management impulses, and improved market access to further support advances in 2026.

Truist Wealth

We also maintain a modest gold position as a portfolio diversifier. After becoming stretched to the upside, gold has cooled in recent months. We continue to see diversification benefits and a supportive backdrop.

Wells Fargo Investment Institute

Lower interest rates, a stable dollar, and quickening economic growth in 2026 could drive moderate demand growth for commodities. We expect further price gains in both Precious and Industrial Metals during 2026 but rising crude oil supplies should restrain overall commodity returns for the year.

BlackRock Investment Institute

We suggest looking for a “plan B” portfolio hedge as long-dated Treasuries no longer provide portfolio ballast – and to mind potential sentiment shifts. We like gold as a tactical play with idiosyncratic drivers but don’t see it as a long-term portfolio hedge.

Comerica Wealth Management

Demand for commodities is shaped by energy transition and climate considerations. Clean energy materials, including rare earth elements, are in high demand due to their critical role in renewable technologies. Agricultural commodities remain volatile, influenced by climate variability and geopolitical factors. Commodities remain a hedge for inflationary pressures and an important allocation for well diversified portfolios.

Deutsche Bank

Search for rare earth substitutes should intensify. Oil prices expected to stabilize at low levels. Gold has further upside potential.

Goldman Sachs

Commodity allocations are also more likely to be about their hedging value this year, with soft returns on the index in our base case. Strength in supply should keep energy and industrial metals except copper on the back foot. But we expect gold to see continued strength as reallocations to the asset class, especially from central banks, continue.

Deutsche Bank

Gold and some non-traditional investments, such as in private equity or infrastructure, merit consideration.

BNP Paribas

The dollar will lose ground against EM high-yield currencies and the euro, while maintaining relative strength versus Asian FX.

Capital Group

The dollar will weaken as rates in the US come down and growth moderates.

Carmignac

The most attractively priced hedges can be found in credit default swaps, the Japanese yen and gold.

DWS

We see the dollar as fairly valued at EUR/USD 1.15.

Franklin Templeton

Yield curves look poised to steepen, and the US dollar will remain weak.

Goldman Sachs

For foreign exchange, our baseline view should favor pro-cyclical currencies. The dollar should probably still depreciate in this backdrop of solid global growth, especially if the Fed cuts rates while many other central banks do not.

Lombard Odier

We expect the US dollar to weaken as US interest rates fall. Alternative assets, especially gold, can offer portfolio diversification amid policy uncertainty.

Pictet Asset Management

When it comes to currencies, our main call is that we expect the dollar to fall some 5% in 2026. The greenback could lose even more if the Fed yields to political pressure and provides more stimulus than is necessary. In the worst-case scenario, such a dovish shift in the Fed’s policy could trigger a double-digit loss in the dollar.

Russell Investments

Improving global earnings fundamentals and the potential for the trade-weighted US dollar to weaken supports the case for global diversification, with emerging markets being one potential area of opportunity for active management to shine.

UniCredit

Currency markets anticipate a gentler decline in the dollar, while commodities remain subdued, with oil under pressure and gold supported by long-term safe-haven drivers. Oil prices subdued at $60-65 per barrel, while gold remains supported at $4,100-$4,400 per ouce.

BCA Research

There is a debate within BCA about the cyclical dollar outlook (we are structural bears). We are very likely to favor short dollar positions in reaction to a non-recessionary equity market selloff.

Brandywine Global

The combination of monetary easing and fiscal easing outside the US supports further improvement in economic activity in the rest of the world through the balance of 2026. As growth differentials narrow between the US and the rest of the world, the dollar is likely to weaken further.

Capital Economics

2026 should prove to be a better year for the dollar against the euro and sterling, but the yen may strengthen a touch against the greenback.

Citi

In foreign exchange, we remain long EMFX carry related to our EM local position, but hedged with G10 and EM low yielders.

Deutsche Bank

Dollar stability will be maintained, including against the euro. The yen may appreciate slightly against the dollar. PBOC appears intent on keeping the yuan stable.

JPMorgan Chase & Co.

Our dollar view for 2026 is net bearish, albeit smaller in magnitude and less uniform in breadth than in 2025. We are moderately bullish on the euro — a view supported by euro-zone growth and German fiscal expansion.

Morgan Stanley

The US dollar could weaken early in 2026 but rebound in the second half; European currencies may lose strength as rate cuts take hold.

Pictet Asset Management

We expect the euro and the yen to be major beneficiaries of the dollar’s weakness. The Swiss franc remains on a long-term appreciation trend thanks to its defensive characteristics, though we expect the franc to be marginally weaker against the euro in the coming year. We remain cautious on sterling because of persistent economic weakness and easier monetary policy from the BOE.

Schroders

We are inclined to anticipate US dollar depreciation on a structural basis, given its rich valuation, a diminished appetite for foreign funding of US deficits and longer-term potential for fiscal monetization.

T. Rowe Price

The US dollar’s decline through most of 2025 is likely to extend into 2026 as the Fed cuts short‑term rates even as other central banks are much further along in their easing cycles.

Tallbacken Capital

The dollar’s risk is to the downside. The Fed remains a marginal dove relative to the ECB and BOJ, while inflation continues to further exacerbate real yield differentials. Further, potential German fiscal expansion and upside growth in Europe provide upside risk to the Euro.

UBS

The euro, Australian dollar, and Norwegian krone are preferred over the US dollar, as anticipated US rate cuts may put pressure on the greenback. Financial repression could contribute to increased currency volatility in the future, and high-yielding currencies are poised to benefit as risk appetite broadens in FX markets over the next year.

BNP Paribas

Markets are likely to remain in the "expansion" regime of our framework, which tends to be pro-risk, bearish duration and dollar-negative.

HSBC

We emphasize FX diversification to position for US dollar volatility and strength in other currencies.

Lazard Asset Management

With global investors increasingly seeking to hedge their US dollar exposure on any US currency rally, there are also potential gains on FX in addition to share prices.

LPL Financial

We remain respectful of the dollar’s long-term uptrend and maintain an innocent-until-proven-guilty outlook. However, the likelihood of additional monetary policy easing amid a slowing labor market, lingering trade policy uncertainty, and ongoing concerns over the sustainability of the deficit could limit upside to the upper end of the dollar’s consolidation range (107.50–110 area) in 2026.

Societe Generale

Protection is still imbedded into our asset allocation, through buying the dips on gold and widely diversified currency strategy, with three blocs: although we have made no change to our 28% allocation to the dollar (to be burdened by a more dovish Fed than expected currently) and 38% to the euro, we shift some of our heavy yen exposure (-3 points to 15%) into EM currencies (+3 points to 15%).

State Street

Fiscal and policy developments create a risk that dollar weakness may offset gains from US equity holdings for international investors — selective hedging of dollar exposure is worthy of consideration to help preserve portfolio returns.

BNY

As the world continues to shift toward a multi-polar balance of power, we think multiple reserve currencies will be used for trade finance, payments and store of value. As fiscal vulnerabilities across developed economies weigh on major currencies, the dollar’s safe haven status is on softer footing. We think investors will increasingly hedge their dollar exposure.

JPMorgan Asset Management

We remind investors again to think carefully about their currency exposure since, as in 2025, dollar moves have the potential to be a major contributor to final returns.

Bank of America

We expect 5.4% total returns for private credit in 2026, down from 9% this year. This potential for lower returns will impact allocation decisions, and investors may pivot to high-yield bonds or other asset classes instead.

Brandywine Global

The backdrop remains constructive for securitized credit. Resilient credit fundamentals, elevated all-in yields, relatively cheap valuations, fading rate volatility, and prospective easing of bank regulations should drive further spread tightening.

Citi

In the illiquid corner, we go long European carbon allowances.

Fidelity International

Gold, absolute return strategies, and private assets should provide diversified resilience for portfolios in the year ahead.

Franklin Templeton

Within private markets, commercial real estate debt, infrastructure and secondary offerings of private equity are our preferred areas.

HSBC

Hedge funds offer diverse strategies that can capture opportunities amid macroeconomic shifts, dispersion between winners and losers from AI, and rising M&A activity.

Lombard Odier

We expect the US dollar to weaken as US interest rates fall. Alternative assets, especially gold, can offer portfolio diversification amid policy uncertainty.

LPL Financial

Continue to utilize equity market-neutral and tactical discretionary global macro strategies as portfolio diversifiers, particularly in an environment of elevated volatility and ongoing uncertainty. Merger arbitrage and private equity should benefit from renewed momentum in corporate dealmaking, in our view.

Macquarie

Private credit has continued to witness significant growth. The outlook for direct lending in 2026 is strong in both the US and Europe, where we expect an uptick in deal volumes driven by increasing private equity M&A activity as interest rates continue to moderate. Asset-backed finance is also poised for strong growth in 2026.

Macquarie

We believe infrastructure debt is particularly interesting given the long-term themes.

Nuveen

We also think investors should look to less-discovered areas such as broader alternative credit instruments like senior loans and collateralized loan obligations, and more esoteric options such as private investment grade and asset-backed finance. They should also look at second-derivative trades from the AI boom, as well as capitalize on potential turnarounds in municipals, real estate and private equity.

Nuveen

Securitized assets (especially commercial mortgage-backed securities) offer strong fundamentals and attractive valuations. Likewise, senior loans provide a compelling combination of attractive yields and value.

Nuveen

In public markets, we favor electric utilities trading at a discount while delivering accelerating earnings growth. In private markets, we focus on investments aligned with climate and digital transformations – such as clean energy generation, energy storage and data centers.

Russell Investments

Long-term shifts toward increasing geopolitical risk, supply chain resilience, and record and rising government debt levels highlight the importance of extending portfolio resilience and access through allocations to real assets, private markets, and new alternative diversifiers.

Russell Investments

We see value on both sides of the fixed income spectrum. Public markets provide fair-valued duration and liquidity as policy easing unfolds, while private markets deliver yield, diversification, and access to real-economy assets.

Russell Investments

Listed infrastructure and real estate offer liquidity and market access, while private real assets provide durable cash flows, structural yield, and direct exposure to the AI and energy transition buildouts. Together, we believe these exposures can anchor multi-asset portfolios through 2026.

State Street

Investors need exposures that deliver sustainable income, provide genuine diversification, and give access to growth themes that are reshaping the global economy. Alternatives — spanning private credit, real assets, infrastructure, private equity, and select hedge fund strategies — offer the tools to meet these demands.

Truist Wealth

Hedge funds are positioned to find opportunities amid global crosscurrents and asset class dispersion. Private markets should benefit from a pickup in M&A activity, improved business sentiment, and deregulation. Moreover, many emerging artificial intelligence players remain concentrated within private markets, adding to their appeal.

Barclays Private Bank

Private markets are well-positioned to offer resilience. Their long-term focus and alignment between managers and investors help to shield them from market ructions, enabling more stable, resilient and noncorrelated returns. We expect private equity to remain well-supported in early 2026, driven by slower but still resilient growth, falling interest rates and strong returns in less-cyclical service sectors.

Bel Air Investment Advisors

We also expect private equity and real estate to generate improved returns going forward, while private debt returns remain stable.

BlackRock Investment Institute

We find infrastructure equity valuations attractive and mega forces underpinning structural demand. We still like private credit but see dispersion ahead – highlighting the importance of manager selection.

Future Standard

With inflation still elevated, policy uncertain, and risks to the fiscal situation and central bank independence, bonds are no longer a reliable offset for equities. Private markets have historically offered an opportunity to source diversification across a broad set of asset classes.

Future Standard

Investors should consider private equity as a long-term portfolio enhancer. We favor the lower and core middle market, where private equity remains private and multiples are more attractive.

Future Standard

While spreads have tightened, private credit continues to offer a 200 basis point premium over traded credit markets. Despite idiosyncratic issues, credit health is broadly healthy, as demonstrated by lower leverage and improving debt service coverage.

Goldman Sachs Asset Management

A more constructive backdrop for new deal and exit activity may lead to greater dispersion of manager returns in private equity. Private credit continues to generate higher yield than public markets, with lower defaults historically than syndicated loans. Rigorous underwriting is key and there’s emerging opportunities in infrastructure driven by AI and energy transition.

HSBC

Private credit can help deliver steady income through yield-focused lending, while infrastructure provides a hedge against inflation.

iCapital Research

We like the long-term demand fundamentals for infrastructure, where significant supply/demand imbalances across digital and power assets are driving return outcomes that have low correlations to broader public markets.

iCapital Research

Macro hedge funds should be well-positioned to take advantage of an increasingly complex global market backdrop as several key investment themes ripple across asset classes.

Invesco

A more benign risk environment, better growth, and stable inflation, coupled with easier US monetary policy, are conditions that we believe should support private credit.

Janus Henderson

We see enormous opportunity in private credit strategies, less in direct lending but very much in asset-backed finance (benefitting from strategic deal structures backed by real world collateral) and emerging market private credit.

Janus Henderson

Securitized assets and private credit can provide diversification, high credit quality, and income potential, which in our view makes them a strategic consideration for resilient portfolios.

JPMorgan Asset Management

To protect against a fall in tech stocks, investors should consider high-quality, long-duration bonds and defensive equity sectors. To protect against inflation risk, investors should allocate adequately towards alternative assets, which should support a portfolio whether inflation is acute or chronic.

JPMorgan Asset Management

All told, we remain constructive on private equity and private credit. In private equity, falling US interest rates will make borrowing cheaper, helping boost returns and supporting current valuations. In private credit, declining US interest rates will ease debt servicing costs, helping mitigate some default risk even as this gradually compresses headline yields.

JPMorgan Wealth Management

In private credit, we still believe investors are being compensated for the risk they are taking, given nearly 10% yields for newly issued debt.

JPMorgan Wealth Management

Given the potential for a stickier and more volatile inflation environment, we believe investors should focus on assets that have a lower volatility compared with equity but a positive correlation to inflation. Based on historical examples, gold and diversified hedge fund strategies provide the most encouraging results.

Lazard Asset Management

In a world of stretched valuations, uncertain growth, and modest bond yields, income-producing real assets — especially infrastructure — offer inflation protection and moderate appreciation with lower volatility.

LPL Financial

Within private markets, we remain constructive on infrastructure and secondaries, both of which have demonstrated resilience and steady growth throughout the year. At the same time, we are moderating our tactical view on trend-following strategies, given their current heavy long exposure to risk assets. We also believe a more selective approach is warranted in private credit, given signs of deterioration in select segments of the market.

Macquarie

After several challenging years, real estate looks to be a compelling value play in 2026. Yields have expanded sharply across most sectors and markets, creating an attractive entry point for investors. In our view, the best opportunities remain in sectors supported by underlying supply-demand imbalances, such as living, logistics and data centers.

Neuberger Berman

In private equity, provide liquidity to top‑tier sponsors via midlife co‑investments, GP‑led continuation funds and custom hybrid capital solutions.

Neuberger Berman

In private debt, favor disciplined direct lenders in an increasingly crowded market.

Northern Trust Asset Management

Private credit is evolving, with tight spreads making direct lending less attractive and return potential shifting to more complex strategies such as asset-backed finance, distressed credit and real estate debt. Private equity buyout dry powder still far exceeds that of direct lending, suggesting ample runway for growth in private credit.

Northern Trust Asset Management

AI bolsters the secular case for real assets, especially infrastructure. These assets are a direct beneficiary of long-term investment trends in technology (data centers) and energy transition (renewables, transmission grids). Infrastructure offers resilience and a necessary hedge against inflation that few other asset classes can provide.

Nuveen

Private credit headlines question whether the market is oversaturated or cracking. We see issues with underwriting and deal structure in riskier segments, but strong opportunities remain, particularly in middle-market direct lending. Selectivity and partner choice will prove critical – rising tides will no longer lift all boats. Deal structure and covenant protections will matter more.

Nuveen

Private equity also shows promise. Lower interest rates should spur M&A activity, and tougher fundraising means experienced managers are deploying capital. We favor senior over junior capital and prefer secondary markets with single-manager structures.

Nuveen

Across both private and public real estate, we focus on sectors with compelling supply/demand characteristics, such as senior housing, medical office and data centers.

Principal Asset Management

Structural tailwinds position private markets for long-term growth, diversification, and income potential. AI-driven infrastructure demand is accelerating, particularly in data centers and energy transmission.

Principal Asset Management

Declining leverage costs and Fed easing are improving conditions for private real estate and private credit.

Principal Asset Management

Real estate fundamentals are stabilizing, with standout opportunities in data centers and residential sectors.

Principal Asset Management

Private credit continues to gain market share from banks, with attractive yields in the lower middle market.

Schroders

Emerging market debt offers better dynamics and higher real yields than developed market debt. There are also opportunities to generate income from diversifying investments such as insurance-linked securities and infrastructure debt. Liquid hedge fund strategies could also offer a means of increasing diversification whilst remaining invested.

Schroders

Private markets offer attractive entry points following recalibration.

State Street

As we have seen, gold and other commodities, income-generating assets, real assets, and private markets have all benefited from investors adopting a broader approach. There is room for broader adoption, risk management impulses, and improved market access to further support advances in 2026.

T. Rowe Price

Stabilizing interest rates, lower market volatility, and demand from AI‑related projects are helping to end the drought in key deal markets, driving renewed growth in private equity and credit.

Tallbacken Capital

AI gains will not hit all parts of the economy – and all people – equally. Further, the Fed cutting into ~2% GDP, ~3% inflation, and strong earnings growth will have the effect of further exacerbating the wealth effect. You need to own inflationary assets (e.g. real estate and equities) in an environment with strong structural inflationary factors and potential upside risk from monetary policy.

Truist Wealth

Private credit offers attractive yields; that said, manager selection will remain crucial given the growth in flows.

UBS

Adding alternatives, such as hedge funds and private equity, is a key part of effective diversification, and for many investors with an endowment style portfolio an allocation of up to 40% of total assets to alternatives can enhance risk-adjusted returns.

UniCredit

Private credit remains an opportunity for enhanced yield, but selectivity and rigorous due diligence are essential, particularly as refinancing risks and opaque exposures could amplify volatility in a downturn.

Wells Fargo Investment Institute

We think alternative investments and private assets could be attractive vehicles for portfolio resilience and upside capture. In particular, we see opportunities in secondaries, small- and middle-market, growth-equity, and infrastructure investments.

Amundi Investment Institute

For real-return resilience, we favour greater allocation to alternative income and inflation hedges in real assets. Private credit and infrastructure are well positioned to benefit from structural themes such as electrification, reshoring, AI, and robust demand for private capital, particularly in Europe. Diversification should structurally include a broader commodities exposure, in particular to gold, and selected currencies such as the yen, euro and emerging currencies that may benefit from a weaker dollar.

BlackRock Investment Institute

We favor a scenario-based approach as we learn more about AI winners and losers. We lean on private markets and hedge funds for idiosyncratic return and to anchor portfolios in mega forces.

Deutsche Bank

New regulatory frameworks simplify access to alternative investments. Alternatives provide additional opportunities for portfolio diversification. Infrastructure investments remain an obvious focus.

Evercore ISI

For the credit markets, the combination of the proliferation of private credit, and the associated headlines and strains in private credit lenders and businesses in recent months which comes with a rise in bankruptcy filings at a minimum imply that “attention must be paid” for further signs of deterioration and larger systemic spillovers.

Future Standard

The artificial intelligence theme has become so significant, investors should consider ways to ensure diversification between AI builders and AI users. Public markets are concentrated in the former, while private markets offer an opportunity to allocate to the latter at scale.

iCapital Research

More policy clarity makes private markets attractive, especially as both front-end and long-end rates fall in 2026. However, selectivity is as critical as dispersion across vintages and strategies.

Macquarie

Fundraising and deal activity in infrastructure rebounded strongly this year, and we expect this momentum to continue into 2026. Infrastructure valuations represent an attractive entry point, particularly relative to listed equities. Earnings growth is likely to remain robust, supported in the near term by healthy nominal GDP growth and in the medium term through exposure to the compelling secular trends of digitalization and electrification

NatWest

Persistent inflation has increased the correlation between equities and bonds, reducing bonds’ defensive qualities. This could very well continue given tariff frictions and robust wage growth across developed markets. One way to potentially address this in portfolios is to invest in so-called "liquid alternatives."

NatWest

Private markets offer distinct underlying economic exposures, business models and economic sensitivities. As access improves, these opportunities could broaden the investible universe and enhance portfolio outcomes when combined with public market strategies.

Pimco

The rise of stablecoins and tokenized assets points to a transformative year ahead for digital finance, though volatility, tax treatment, and regulatory uncertainty remain significant considerations.

Brandywine Global

For BDCs, in our view, any signs of rising credit stress would have meaningful implications for the broader corporate landscape.

Columbia Threadneedle

Private equity could face headwinds from higher borrowing costs and tighter liquidity.

Deutsche Bank

Gold and some non-traditional investments, such as in private equity or infrastructure, merit consideration.

BNP Paribas Asset Management

Private assets, particularly alternative credit and real assets, continue to attract capital, supported by resilient fundamentals and policy tailwinds, though selectivity and rigorous credit analysis are increasingly important.

Truist Wealth

Historical patterns, including strong post-rate-cut performance and gains in similar cycles, reinforce the potential for high single- to low double-digit market returns.

Brandywine Global

EM local currency assets are well positioned to benefit from a softening dollar environment and growing appetite among global investors to reduce US asset concentration. Within EM, local currency fixed income continues to offer selective appreciation potential against the US dollar. Opportunities remain particularly compelling in parts of the high yield universe, notably across Latin America, which faces a pivotal election calendar in 2026.

Carmignac

Resilient growth driven by fiscal largesse cannot abstract from late-cycle dynamic and stretched valuations. The best asset classes remain equities and credit but caution is warranted on government bonds.

Carmignac

The lack of diversification in global growth drivers (AI, defense, fiscal) calls for maximum diversification among the sectoral and geographic dimensions.

JPMorgan Chase & Co.

Lower macro volatility looks set to support EM local markets in 2026. Overall growth (excluding China) is forecast to maintain a trend-like pace of 3.3%, helped by factors including fading tail-risks on tariffs, easier monetary policy and ongoing tech capex. We continue to see further EM rate cuts in the pipeline, but the pace and breadth of cuts are expected to moderate in 2026.

LPL Financial

Given an overall investment environment that is subject to rapid change, we continue to favor balance and diversification across asset classes and regions, including allocations to alternatives that can help enhance portfolio resilience and stability. Stay alert during any periods of market turbulence in order to take advantage of corrections in equities.

Morgan Stanley

We recommend an overweight position in stocks, equal-weight in fixed income and underweight in commodities and cash, with a strong preference for US assets.

Pictet Asset Management

Emerging market debt, credit and equity all look attractive thanks to a convergence of positive forces. Developing markets are increasingly being driven by domestic macro- and microeconomic factors – growing domestic investor bases, sensible economic policy, more robust institutions, better infrastructure, higher quality workforces, the spread of AI beyond its Silicon Valley heartland etc. – rather than just a weakening of the dollar, as has been the case in the past.

Societe Generale

We expect the massive distribution of NGEU funds from the EU to member countries to accelerate by year-end, supporting peripheral economies’ growth in the coming years as infrastructure projects are implemented. Consequently, undervalued peripheral European assets are likely to continue outperforming core assets in both bonds and equities.

UBS

Income-seeking investors should diversify, by blending quality bonds and higher yielding strategies with income-generating equities and structured investments. This should help generate yield and manage risks associated with tight credit spreads and market uncertainties.

UniCredit

Asset allocation for 2026 reflects resilience and selectivity. Overweight emerging market equities and EM debt, supported by attractive valuations and structural tailwinds. Neutral global equities and developed-market bonds, given high valuations and fiscal pressures. Preference for issuers with robust balance sheets, resilient cash flows, and strong governance standards.

Vanguard

Our capital market projections show that the strongest risk-return profiles across public investments over the coming five-to-10 years are, in order: (1) High-quality US fixed income, (2) US value-oriented equities, (3) Non-US developed-market equities

Bank of America

A weaker US Dollar, lower rates, and low oil prices provide a solid backdrop for emerging markets to continue to perform well in 2026.

Bel Air Investment Advisors

While we continue to emphasize US markets, we believe emerging markets will likely continue to outperform the US, and the rest of the developed world may match or exceed US returns.

BlackRock Investment Institute

We get granular in public markets. We favor DM government bonds outside the US. Within equities, we favor EM over DM yet get selective in both. In EM, we like India which sits at the intersection of mega forces. In DM, we like Japan as mild inflation and corporate reforms brighten the outlook.

Carmignac

Sustained inflation, fiscal activism, and unstable equity–bond correlations demand a more selective and agile investment strategy, where active, global, valuation-aware positioning outperforms passive exposure.

iCapital Research

Midterm election years are historically volatile. We see an average return of 5.7% with a 17.5% average drawdown reinforcing the importance of being diversified across different asset classes.

JPMorgan Wealth Management

We expect to see tactical opportunities in Chinese assets, as sentiment swings more rapidly than fundamentals

Lombard Odier

The moderate pace of economic growth, more accommodative monetary conditions, and a weaker dollar create fertile ground for risk assets, even as we see limited upside from fixed income. By seeking value opportunities, embracing emerging markets, and diversifying further through real assets, investors can position portfolios for resilience amid inevitable risks and potential shocks.

Northern Trust Asset Management

We largely prefer equities over bonds. However, structural divergence within the asset class provides a clear mandate for active management. Depending solely on momentum from the broad equity rally likely will prove costly, and security selection must be a core part of the investor’s toolkit.

Truist Wealth

Compared to several years ago, our analysis supports a larger allocation to international markets. These markets remain attractively valued on a relative basis, bolstered by increased stimulus in Europe and Japan, as well as new Fed members who are likely to lean dovish. This dynamic could put downward pressure on the dollar later in the year.

Vanguard

Our medium-run outlook for multiasset portfolios remains constructive, with positive after-inflation returns likely to continue.

Bank of America

A better understanding of the impact that AI has on growth, inflation and capex will likely cause market volatility. The K-shaped economic recovery and fiscal dominance are other sources of expected turbulence.

HSBC

Our analysis of different asset classes finds that there’s no silver bullet in achieving portfolio resilience under various risk scenarios. We therefore continue to diversify across assets, regions, sectors and currencies via multi-asset strategies to manage concentration and downside risks.

NatWest

America’s structural advantages endure, and we believe it will remain exceptional for the foreseeable future.

Societe Generale

The euro should be a beneficiary of robust growth delivery from a more dovish Fed on the road to a change in management – although we’re not building a case for the US central bank to lose its independence – clearly a potential market disruptor. This will help allocation to the region as an efficient cheap diversifier.

Barclays Private Bank

Expect market sentiment to swing repeatedly from "this is a new paradigm" to "the party is over." In such context, risk management becomes essential, and as we enter 2026, we advocate for a thoughtful strategy focused at its core on owning high-quality assets.

Barclays Private Bank

European valuations remain attractive relative to global peers. Political risks in France and fiscal uncertainty in Germany still weigh on sentiment, but improving corporate fundamentals support a constructive view, with potential to add to holdings on price weakness.

Citi

The midterm elections may become a negative driver, but only in the third quarter.

Goldman Sachs

While total returns on government bonds may be mostly about earning the yield, bonds are likely to be an effective hedge against the largest risks to equities (a recession or a reversal of AI optimism), particularly at shorter maturities.

Invesco

We think the artificial intelligence investment theme plays out further and think some of the parallels being drawn with previous bubbles don’t fully hold up. However, we favor rebalancing portfolios to navigate growing risks.

JPMorgan Wealth Management

Investors should be mindful of higher inflation, shifting trade patterns and the potential for increased market volatility. If geopolitical risk and currency volatility increase in a fragmented world – and we think they will – gold and energy commodities can serve as valuable hedges.

Lazard Asset Management

Low interest rates and energy prices, rising real wages, and continued fiscal expansion support European growth in 2026. Risks include uncertainty around defense spending, political fragility, and countries’ willingness to implement economic reforms.

Lombard Odier

The impact of tariffs will be felt as strongly in 2026, slowing the global trade in goods, denting profits for businesses across the world, and raising costs for US consumers. Even if the Supreme Court rules against some of the current US tariffs, we would expect them to be quickly reimposed using different legal justifications. Policy uncertainty, fragile geopolitics and tense US-China relations also look set to persist.

Russell Investments

AI could disrupt labor markets if adoption proves to be much faster than prior general-purpose technologies. It could also upend long-standing business models.

Vanguard

US technology stocks could well maintain their momentum given the rate of investment and anticipated earnings growth. But let us be clear: Risks are growing amid this exuberance, even if it appears “rational” by some metrics. More compelling investment opportunities are emerging elsewhere even for those investors most bullish on AI’s prospects.

Apollo Global Management

Current pricing implies a 30% recession probability for the US in 2026. In a slowdown, non-AI-related equities (the S&P 493) face meaningful earnings risk. The combination of weakening growth and persistent inflation increases the likelihood of further market turbulence, requiring investors to be cautious as they position portfolios in 2026.

BlackRock Investment Institute

The AI builders are leveraging up – investment is front-loaded while revenues are back-loaded. Combined with already highly indebted governments, this is creating a more levered and fragile financial system vulnerable to shocks.

BNP Paribas

We identify three key risks: an AI-driven equity market correction; inflation resurgence from excess US stimulus, geopolitical energy shocks or EM dynamics; and renewed trade policy uncertainty triggered by a US Supreme Court ruling on tariffs.

Capital Economics

Our base case is that a change in Fed leadership in May will not fundamentally threaten the institution’s independence or trigger a major shift in policy, but it remains a clear source of risk.

Capital Economics

We suspect that a combination of central bank rate cuts and a subtle increase in financial repression will keep government bond markets broadly anchored. But short, sharp sell-offs triggered by fiscal worries – similar to those seen in France, the UK and the US this year – are likely to be repeated at points in 2026.

Capital Economics

If trouble is coming, it is more likely to emerge from the shadowy parts of the system, in particular private credit and related structures that have grown rapidly in size and importance in recent years, and yet remain lightly supervised.

Capital Group

Although there are many encouraging signs for the year ahead, there are also clear risks on the horizon, and investors should prepare for inevitable market pullbacks. Stocks are expensive. Sticky inflation and mounting government debt in the US, Europe and elsewhere are also cause for concern.

Columbia Threadneedle

We believe the risk of policy error – specifically, cutting rates too far too fast – is rising. Lowering short-term rates to ease financial strains could steepen yield curves sharply if bond investors lose confidence in inflation control, raising the five‑ to 10‑year funding cost and blunting any short‑rate relief.

First Abu Dhabi Bank

Overall, we would conjecture that risks to the global macro outlook remain tilted to the downside as we enter 2026. We would caution that a combination of prolonged rates uncertainty, intensifying protectionism, and labor supply shocks could reduce growth. At the same time, fiscal vulnerabilities, potential financial market corrections, and erosion of institutions (through political interference), could also threaten market stability.

Northern Trust Asset Management

While we expect inflation to remain contained at its above-average rate of about 3%, investors must closely monitor the tail risks of inflation reigniting. The Federal Reserve’s balancing act between fighting inflation and supporting the labor market risks inflation levels staying above target. Tariffs and tighter immigration policies may put pressure on prices through goods and wages.

UBS

Investors should consider a diversified approach to hedging market risks, including holding adequate liquidity to prevent forced selling, and consider quality bonds and gold for stability. Low volatility periods can be used to lock in gains with structured investments.

Allspring Global Investments

Given uncertainty around the impacts of US fiscal, tariff, and immigration policies on profit margins, it’s probable that companies will save and hire carefully and consumers will remain cautious amid a slowing job market.

Apollo Global Management

While we do believe that AI will continue to grow, if there was a slowdown in the space, we can expect that impact to be felt across the economy. It would have negative consequences not just for data centers, but also for stocks, consumers and beyond. We’ll be carefully monitoring for any signals of weakening AI demand.

Bel Air Investment Advisors

Key risks to the market and economy include an unexpected surge in inflation, Federal Reserve policy missteps, escalating geopolitical tensions, and further weakening in labor markets.

BNP Paribas Asset Management

We believe the AI theme is not yet in bubble territory. Expectations for the leaders of AI are high, but valuations remain reasonable. However, we are aware of and monitoring several risk factors going forward and are watching for signs of a digestion period in the spending cycle.

Brandywine Global

For BDCs, in our view, any signs of rising credit stress would have meaningful implications for the broader corporate landscape.

Capital Economics

Political shocks that cast doubt over a government’s commitment to fiscal discipline can provoke a sell-off in bond markets and a tightening in financial conditions, which in turn weighs on economic growth and adds to concerns over fiscal sustainability.

Columbia Threadneedle

Mounting government deficits and diverging policy paths remain key risks.

Comerica Wealth Management

Despite positive growth indicators, recession risks remain elevated but less than 30%. This underscores the importance of maintaining diverse portfolios and preparing for the potential increase in market volatility. Factors contributing to recession risks include ongoing geopolitical wars and tensions, monetary policy uncertainties, and external shocks such as commodity price fluctuations.

Franklin Templeton

We think a health warning is in order. We have entered an era of big and intrusive government, which risks lowering returns and increasing risk across capital markets over the remainder of this decade.

Goldman Sachs

The key risks are that a fragile job market sparks recession fear or the equity market questions the value of AI-related revenues. Shorter-term US rates exposure should be protective in these situations.

Goldman Sachs Asset Management

A marked reversal and broad unwind of AI-related investments or significant labor market weakness could be the precursor to a hard landing for the global economy.

HSBC

We remain mindful of policy and macro uncertainty. The US Federal Reserve could end its rate-cutting cycle sooner than expected, and data-center construction could face delays due to labor shortages – not to mention the potential for escalating geopolitical tensions in any region.

JPMorgan Asset Management

The risk for 2026 is that as activity gains momentum, workers start to feel more confident asking for higher pay and inflation does become a bigger issue. We are mindful that economists generally have a poor track record of forecasting inflation spikes.

JPMorgan Chase & Co.

Risks to this outlook include worryingly high inflation in the US, which would cause the Fed to stay on hold.

Lazard Asset Management

AI-related capex is increasingly debt funded, with assets that may become obsolete in a relatively short period of time, raising the risk of overcapacity and delayed returns. If tech earnings disappoint, the broader market could face meaningful drawdowns given its dependence on this sector. Security selection among AI leaders will be critical in 2026.

Lazard Asset Management

The biggest US debt market risk is diminished Fed independence, which could undermine inflation-fighting credibility and the dollar.

LGIM

Even as the spring’s tariffs-related volatility recedes into distant memory, we recognize that both geopolitics and domestic politics retain their ability to wrong-foot markets.

Ned Davis Research

Cycles indicate headwinds as equity advance becomes more mature. Extreme valuations threaten longevity of cyclical and secular bull markets.

Neuberger Berman

Investors need to prepare for risk-on rallies, but also stay wary of the fallout should monetary and fiscal policies disappoint or lead to overheating.

Northern Trust Asset Management

Risks remain elevated, including trade realignment, lingering inflation, government debt burdens, labor market shifts and geopolitical tensions.

Nuveen

Despite our positive macroeconomic outlook, persistent risks remain. Geopolitical turmoil could escalate, or new threats could emerge. On trade, we anticipate no fresh tariffs next year, but given 2025’s surprises, we would not rule out fresh shocks in 2026. The US Supreme Court will likely rule on existing tariffs, potentially upsetting the existing framework. We believe other authorities could recreate the tariff regime on surer legal footing, but deployment may take time, and uncertainty could resurface. Questions about Fed independence could linger, maintaining downward pressure on the dollar.

Principal Asset Management

Structural risks, like K-shaped consumption and constrained labor supply, add fragility to the outlook.

Schroders

We are watchful for signs that policy has become too stimulative, such as a re-tightening of the labor market or rising core inflation and wages. Fiscal policies in the US and elsewhere are also storing up trouble. The bond market could be a catalyst for a possible correction.

Schroders

Our optimism about the outlook for 2026 doesn’t diminish our awareness of the risks. If as we expect, markets continue to rise, the risk of a major correction by definition becomes more acute. That is particularly true with valuations already at stretched levels.

State Street

Despite fading market shocks, ongoing geopolitical tensions and elevated gold volatility signal that concerns about global risks may linger in 2026.

Tallbacken Capital

The key macro risk next year comes down to AI infrastructure: if the AI fixed asset boom is not able to provide a convincing Return on Invested Capital (ROIC), we expect a broader sell-off in equities and more speculative credit. We need to remind ourselves that the AI capex spend is dramatically larger than most governments’ fiscal programs; the micro risk is now the macro risk.

UBS

There are risks that could bring markets back to earth in the year ahead, including: 1) a potential disappointment in AI progress or adoption, 2) a resurgence or persistence of inflation, 3) a more entrenched phase of US-China strategic rivalry, and 4) the (re-) emergence of sovereign or private sector debt concerns.

BNY

Evolving fiscal dynamics, divergent monetary policy and currency headwinds remain risks.

Deutsche Bank

Geopolitics, inflation, sovereign debt, tariffs: many risk factors are likely to persist in 2026.