What to expect from the markets in 2026?

December 2025 by André Themudo

The global economy is at a turning point. The traditional foundations of the system, from stable supply chains to the sustainable financing of public debt, are under pressure. In a context of high uncertainty and increasing geopolitical fragmentation, 2026 is expected to be marked by a more challenging and less predictable economic environment.

Challenges arising from global instability

Market narratives shifted rapidly throughout 2025, reflecting the tension between the adaptation of the global economy and the structural limitations of the major powers. In the United States, economic policies face constraints imposed by "immutable" trade and debt laws, which hinder rapid change. The country remains dependent on external financing to sustain its deficit, which makes treasury bonds vulnerable to fluctuations in global demand.

The combination of high public debt, persistent inflation, and high interest rates creates a fragile equilibrium, with a direct impact on financial conditions and risk appetite. Meanwhile, increasing geopolitical fragmentation is reshaping trade, industrial policies, and capital flows, with national security and resilience taking precedence over economic efficiency. The likely outcome is a scenario of slower global growth, structurally higher inflation, and greater volatility in financial markets.

Strategies for navigating uncertainty

In this environment, risk-taking must be done selectively. In the stock market universe, the United States maintains a prominent position, with opportunities in the banking, healthcare, and artificial intelligence and digitalization sectors. In the bond market, yields remain attractive, allowing for income generation without the need to assume excessive duration or credit risk.

Emerging markets benefit from more accommodative monetary policies, a weaker dollar, and solid investor demand, which favors local currency debt. When constructing portfolios, diversification should take into account the lower reliability of historical correlations between stocks and bonds, and the higher exchange rate volatility. Active currency risk management – through hedged asset classes and dynamic currency strategies – can strengthen portfolio resilience.

Private markets are taking on an increasingly important role as capital shifts toward infrastructure, private credit, and venture capital, seeking additional sources of profitability and diversification.

Key bets for 2026:

• Actions: Overweighting in the US persists, focusing on the structural sectors of banking, healthcare, artificial intelligence, and defense. Thematic opportunities related to energy transition and infrastructure will continue to generate returns.
• Bonds: The high level of yields creates favorable conditions for obtaining income without excessively increasing the duration, favoring investment-grade credit, emerging market debt, and spread assets.
• Portfolio building: In a context of less predictable correlations, combining systematic and fundamental strategies can increase diversification and the ability to generate alpha.
• Private markets and megatrends: The energy transition, the expansion of AI (Artificial Intelligence), and geopolitical fragmentation are structural forces that are expected to shape long-term returns and redefine capital allocation globally.

The role of business and political leaders

Companies play a central role in this new economic phase, accelerating the adoption of disruptive technologies, investing in productivity, and aligning capital with global megatrends. Policymakers, in turn, set the pace of these transitions through their fiscal, industrial, and trade choices. In Europe, the priority is to strengthen security, competitiveness, and strategic autonomy. In the United States, debt and trade management will continue to influence the global balance, while emerging economies seek to capitalize on their demographic and industrial potential.

In a more fragmented world, 2026 will be a test of the adaptability of governments and investors in the face of a new economic regime in formation.