Investors are navigating not just uncertainty, but an unstable environment influenced by tariffs and inflation, among other factors. While volatility may increase, there is likely room for another solid year in 2026, especially for fixed income and international stocks.

As we approach 2026, what can investors expect from the equities market, fixed income, and the overall US economy in the new year?

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

We believe the 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.

Liz Ann Sonders and Kathy Jones review the Federal Reserve’s latest dilemma and the complexity of policy setting in this environment.

We continue to suggest an up-in-quality fixed income bias for the short run, but investors can still consider some of the riskier parts of the fixed income market in moderation.

Overall, we expect 2026 to be another good year of returns for bond investors, but the range of potential outcomes is wide.

After a gangbuster stock market rally since the early-April lows, many of the prior highfliers have taken a breather amid AI bubble and valuation concerns.