Market Outlook – What Will 2026 Bring?
As we look ahead to 2026, our outlook for equity markets remains constructive but increasingly selective. Our bull case for the S&P 500 sits at 7,500, supported by continued earnings growth, resilient liquidity, and a gradual broadening of market participation. Our base case of 7,250 reflects a more balanced outcome in which growth moderates but avoids a sharp contraction, while our bear case of 5,525 acknowledges the growing macro and policy risks that could materialize if financial conditions tighten or confidence breaks. In short, the upside remains intact, but the margin for error is narrowing as we move deeper into the cycle.
From an allocation standpoint, commodities and real assets are becoming harder to ignore. As the dollar continues to weaken and geopolitical uncertainty escalates, the global push toward hard assets has driven metals to unprecedented levels. Silver has surged to $100 per ounce, completing its long-anticipated catch-up to gold after lagging earlier in the cycle. With that catch-up largely achieved, silver miners now take center stage for 2026, offering operating leverage and potential outperformance as margins expand. At the same time, structural demand tied to energy and electrification continues to support uranium and copper—particularly as energy security concerns rise and Trump’s renewed push for nuclear power reinforces long-term demand for nuclear fuel and related infrastructure. These areas represent both cyclical upside and strategic exposure to multi-year trends.
Within equities, we expect the rally to broaden in 2026. The market should become less dependent on the “Mag 7” to carry index-level performance, with consumer defensives, utilities, healthcare, and staples beginning to recover and participate. This rotation reflects a market that is potentially in the later stages of maturing rather than peaking—one in which investors increasingly favor cash flow stability, pricing power, and balance sheet strength over a pure AI narrative. A broader rally does not eliminate risk, but it does suggest healthier internal market dynamics than those seen in narrow, momentum-driven advances.
With that said, volatility is likely to return. 2026 is a midterm election year, and Trump’s first term was no stranger to volatility—rather, it showed that policy headlines and market swings often go hand in hand. We expect Q2–Q3 of 2026 to bring a 10% to 20% drawdown, potentially extending through the late summer months, with a recovery back to all-time highs not occurring until November or late Q4. While we believe the cracks in the cycle begin to deepen in 2026, we do not yet see the conditions in place for a 50% equity decline. As always, this outlook can change quickly with new information, so staying vigilant and adaptive will remain crucial as the cycle continues to evolve.
Ultimately, this outlook reinforces why we emphasize the use of a living financial plan™—and why we built our process the way we did. Markets evolve, cycles mature, and risk rarely shows up on a convenient schedule, which is why a static plan quickly becomes outdated. Ongoing reviews, proactive risk management discussions, and regular portfolio adjustments are essential to navigating periods of opportunity and volatility alike. A living plan allows us to respond thoughtfully rather than react emotionally, aligning investment decisions with changing market conditions, personal goals, and risk tolerance. Disciplined planning and continuous dialogue are what help turn uncertainty into a strategic advantage.
By: Trevor Mann, Portfolio Manager
Published on: 1/23/2026