Research

Outlook: Five forces that could shape markets in 2026

Fidelity’s Asset Allocation Research Team outlines key investment risks and opportunities for the year ahead.

By: Dirk Hofschire Jacob Weinstein

Updated: 11/28/2025

Key Takeaways

A historically wide gap between policy uncertainty and subdued market volatility may narrow in 2026.
Attractive valuations of non-U.S. currencies and other structural factors may support the relative outperformance of non-U.S. equities.
The Fed may find itself on the hot seat, as persistent inflation and high government debt complicate monetary policy.
AI-driven capital spending and favorable fiscal policy could continue to support the health of the U.S. business sector over the coming year.
With wealth playing a larger role in consumption than it has historically, asset-price changes might have a greater impact on economic growth than in the past.

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