As we step into 2026, we see a supportive fundamental backdrop for global markets. Throughout 2025, investors climbed a significant wall of worry, facing a fog of uncertainty from the threat of "DOGE" spending cuts, the looming Tax Cliff, and the specter of a trade war. These risks have now largely receded, giving way to two powerful forces working in investors' favor: policy clarity and an accommodative Fed that is shifting from fighting inflation to protecting expansion.
Our forecast for 2026 is constructive, based on four key points:
- A Supportive Policy Framework (Fiscal + Fed): We believe the combination of policy clarity and an accommodative Federal Reserve creates a powerful tailwind that can enable broader market participation and support valuations.
- Valuations are 'High Altitude, Not Thin Air': While the S&P 500's P/E ratio is high, our view is that comparisons to the dot-com era are misguided, as today's market is fundamentally different. We expect U.S. stocks to hold valuations and see upside risk if lagging parts of the market re-rate.
- AI Volatility, Not a Market Derailment: We do not believe public markets are in a classic "bubble,” but the ecosystem is fragile. We are wary of the increasing use of leverage to fund investment and concerned about valuation excesses in the private markets. We believe AI-driven gains can continue, but expect turbulence along the way.
- Rotation and Diversification are Key: Investors who navigated 2025 with diversified portfolios didn’t just mitigate risk–in many cases, they enhanced returns. In 2026, we see similar dynamics at play. With durable demand drivers in other parts of the market, the opportunity cost of remaining solely in large-cap U.S. tech is rising. Diversification is not just about playing defense; it’s about capturing the rest of the recovery.
Read the complete 2026 Range Market Outlook:
Disclosures:
This communication contains forward-looking statements that reflect Range Advisory, LLC’s (“Range”) current views, expectations, beliefs and/or projections about future events or results. Forward-looking statements involve risks and uncertainties — including, without limitation, market conditions, regulatory changes, economic conditions — any of which could cause actual results to differ materially from those expressed or implied by such statements. Range undertakes no obligation to update or revise any forward-looking statements to reflect new information, future events or otherwise, except as required by law. Recipients should not place undue reliance on forward-looking statements, which are presented for informational purposes only and do not constitute investment advice or a recommendation to buy, hold, or sell any security. Past performance is not indicative of future results. The views, opinions and analyses expressed by Range in this material are those of Range as of the date shown, and are provided for informational purposes only.
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