
Report explores the economic themes that dominated the past quarter-century and what will impact the next 25 years
MINNEAPOLIS, Dec. 4, 2025 /PRNewswire/ - There's reason to be optimistic about U.S. equities in 2026 but several factors need to converge for a bull market to persist, RBC Wealth Management suggests in its Global Insight 2026 Outlook released Thursday.
"The U.S. economy and corporate profits must maintain healthy growth, 'AI 2.0' needs to lead to tangible gains and the market must buck the trend of average 22% correction surrounding midterm election years," said Kelly Bogdanova, Vice President and Portfolio Analyst at RBC Wealth Management–U.S. "It's a tall order, but the market has jumped over high hurdles before."
U.S. equities: Balancing opportunities and risks
RBC Wealth Management believes the 2026 S&P 500 the 12.8% year-over-year Bloomberg consensus earnings growth estimate seems somewhat too lofty but thinks growth has the potential to reach the low double-digit level. The report predicts a 2.2% increase in U.S. GDP for 2026.
Questions about whether AI is in a bubble should persist into 2026. While circular financing deals and the possibility that unprecedented capex spending could soon run into power generation and related regulatory constraints are concerning, Bogdanova notes, "We see certain yellow warning signs rather than a full-fledged bubble at this stage."
Investors should stay flexible and regularly review their portfolios to ensure they're not taking on too much risk in any one area.
"We recommend starting the year with a focus on the healthcare sector, as well defensive dividend growth stocks," said Bogdanova.
U.S. fixed income: Bond prices could face pressure
After a strong 2025, bond market returns look to be more muted in 2026.
RBC Wealth Management expects the Federal Reserve to hold interest rates steady for the bulk of 2026 but with core inflation likely to hold north of 3.00% next year the unemployment rate is projected to rise modestly to 4.60%, we see little scope for interest rates to fall further.
"Given our expectations of minimal Fed rate cuts, improving economic growth, and elevated inflation above the Fed's target, we see scope for modestly higher yields, putting downward pressure on prices and therefore total returns," said Tom Garretson, senior portfolio strategist for RBC Wealth Management – U.S. "We project the 10-year Treasury yield to end the year at 4.55%, up from 4.06% currently."
Credit markets face headwinds in 2026, with limited incremental yield over Treasuries and increased bond supply from tech firms financing AI-related expenditures, while municipal bonds, though less attractive after a year-end rally, still offer some value in longer-term bonds.
The Long View: Top 10 economic trends dominating the past 25 years and the next
The report looks at investment themes that dominated the first 25 years of the 21st century and what will impact the world until 2049.
- First quarter-century: Rise of China, Emerging market growth, Globalization, Rule-based order, Tech domination, Souring demographics, U.S. economic exceptionalism, Rising leverage, Commodity supercycle, European project.
- Second quarter-century: Ascent of China, Rising global middle class, Deglobalization/Multipolar world, Power-based order, Tech/AI/Productivity, Demographic crunch, Diminished U.S. exceptionalism, Fiscal concerns, Climate change/Oil demand peaks, Non-U.S. developed nations gain traction.
For more information on RBC Wealth Management's outlook on the investment landscape for the year ahead from global and regional perspectives, read the whole report here.
Past performance is no guarantee of future results.
RBC Wealth Management, a division of RBC Capital Markets, LLC, registered investment adviser and Member NYSE/FINRA/SIPC.
Investment and insurance products offered through RBC Wealth Management are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, or guaranteed by, a bank or any bank affiliate, and are subject to investment risks, including possible loss of the principal amount invested.
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About RBC Wealth Management–U.S.
RBC Wealth Management is a leading financial services company in the United States, delivering trusted advice and world-class wealth solutions to individuals, families and businesses. With 195 offices across 42 states, RBC Wealth Management supports the complex needs of high-net-worth and ultra-high net worth clients through personalized wealth planning, investment management, estate planning services, and a range of banking and private wealth solutions. As part of RBC, a diversified global financial institution and one of the world's largest banks based on market capitalization, RBC Wealth Management offers the scale, resources and expertise to help families and businesses achieve their financial goals. RBC Wealth Management, a division of RBC Capital Markets, LLC, registered investment adviser and Member NYSE/FINRA/SIPC. Learn more at rbcwm.com.
Media contact
Jennifer Ehrlich, RBC Wealth Management, [email protected]
SOURCE RBC Wealth Management - U.S.
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