U.S. stock market climbs the wall of worry as corporate earnings brighten and economy holds firm, RBC Wealth Management suggests

Mid-Year 2026 Outlook sees the bull market persisting even as fixed income yields test multi-year highs and structural long-term trends accelerate

MINNEAPOLIS, June 15, 2026 /PRNewswire/ - Despite a demanding backdrop of geopolitical tension, elevated Treasury yields, and looming midterm election uncertainty, the U.S. stock market has climbed the wall of worry and the economy has held firm, RBC Wealth Management suggests in its Global Insight Mid-Year 2026 Outlook released Monday.

"Corporate earnings have been the great stabilizer this year, and the profit outlook for 2026 and 2027 has brightened notably since January," said Kelly Bogdanova, Vice President and Portfolio Analyst at RBC Wealth Management–U.S. "The bull market is persisting into its fourth year, the economy remains resilient and investors who stay disciplined are being rewarded, even with real hurdles still ahead."

U.S. equities: Earnings brighten as market eyes midterm elections
The U.S. stock market has shown notable resilience in 2026, with the S&P 500 rallying year-to-date through mid-June and the Information Technology sector outperforming sharply. Corporate earnings have been the great stabilizer, and the profit outlook for 2026 and 2027 has brightened considerably compared to the start of the year.

The Information Technology sector delivered a standout first quarter, posting 49% year-over-year profit growth, with AI capital spending providing continued upward momentum to consensus earnings forecasts across multiple sectors. The buoyant S&P 500 profit outlook checks a key box among the catalysts RBC Wealth Management identified as necessary for the bull market to persist into a fourth year.

With the midterm elections approaching on November 3, RBC Wealth Management is mindful that the S&P 500 has experienced an average 21% correction surrounding midterm election years since 1934. Additional volatility cannot be excluded, particularly if Treasury yields continue to rise or midterm election angst materializes.

"Earnings have cleared a high bar this year, and that has given the bull market real staying power," said Bogdanova. "But we are watching the midterm election dynamic closely, and history tells us it is an obstacle worth respecting." RBC Wealth Management recommends maintaining a Market Weight position in U.S. equities, while scrutinizing Technology holdings where sharp rallies could give way to meaningful volatility.

U.S. fixed income: Yields could reach new cycle highs as investors focus on income
Global bond markets are navigating a challenging stretch at the midpoint of 2026, with rising yields pushing total returns modestly into the red year-to-date. Thirty-year government bond yields across major economies are at or near twenty-year highs, with the simple average breaching 4.0% for the first time since early 2009.

RBC Wealth Management's base case is that the Fed holds rates steady through 2026, but with a clear bias toward potential hikes. We see scope for the benchmark 10-year Treasury yield to test key highs from this cycle: 4.8% from 2025 and potentially the 5.0% level from 2023.

With bond price appreciation likely to remain elusive, RBC advises investors to focus on maximizing income. Credit spreads are tight, with global corporate bonds offering just 0.76% of incremental yield over government peers, but absent a recession, corporate bonds should perform reasonably well. Additionally, bank-issued hybrid preferred bonds offer an attractive alternative to corporate bonds, in our view.

Trends: Unstoppable forces reshaping long-term investment
RBC Wealth Management's mid-year outlook identifies five trends set to shape investment portfolios for decades. The impactful forces are driven by demographics, transformative advances in science and computing, rapidly shifting energy economics and intensifying geopolitical friction.

• Artificial intelligence: AI-related capital spending is expected to reach US$668 billion in 2026, a 75% surge.
• Aging demographics: The global population aged 65 and older is approaching 1.6 billion by 2050.
• Medical advances: AI is accelerating breakthroughs in biology and genomics likely to surprise on the upside.
• Renewables: Solar is on track to become the world's largest electricity source by 2032.
• Defense spending: A shift to a multipolar world order is driving a structural re-rating of defense budgets globally.

For more information on RBC Wealth Management's outlook on the investment landscape for the midyear ahead read the whole report: Global Insight Midyear 2026 Outlook.

Past performance does not guarantee future results.

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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:
Hannah Montplaisir, Communications Manager, RBC Wealth Management

SOURCE RBC Wealth Management - U.S.