LPL Research Presents Midyear Outlook 2026

From data-driven forecasts to economic and investing insights, Midyear Outlook 2026: Policy, Buildouts, & Bottlenecks picks up where the Outlook left off — building on prior themes and exploring new ones.

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EMERGING MARKET DRIVERS

New Themes, Rising Significance

A set of powerful forces stands to shape the direction of markets in the second half of 2026. While each carries its own set of risks and opportunities, together they form a backdrop that calls for thoughtful positioning and a clear view of where disruption and potential may intersect.

  • Midterm elections: Could shift congressional control and policy direction
  • Resource nationalism: Capital steering toward commodities and real assets
  • AI maturing: Focus is likely to move to beneficiaries and return on investment
  • Federal Reserve: Leadership change adds uncertainty — and little room for error

Midyear Outlook Highlights

Policy remains the dominant driver in markets, complemented as the artificial intelligence (AI) narrative continues to evolve and the ensuing strength in corporate earnings. How the conflict in Iran resolves, and how quickly, will continue to shape LPL Research's ongoing perspectives.

 

Economy

Expect growth to moderate but remain positive as strong business investment offsets weakness in housing and rate-sensitive sectors. 

 

Bonds

Sticky inflation and resilient growth are likely to keep the Fed on pause, leaving Treasury yields range-bound.

 

Stocks

An improving but still challenging macro backdrop and AI-driven earnings strength are expected to continue being the key pillars of support. 

 

Commodities

The trend toward resource nationalism should broadly support key commodities.

 

Alternative Investments

Diversification remains key, with alternative strategies helping navigate shifting market conditions.

 

Currencies

The dollar’s longer-term strength remains in focus, supported by tech leadership and pro-growth policy.

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"We believe equity markets should be constructive in the second half … Being well-balanced is key, but it is perhaps most important when policy shifts can cause the market to turn on a dime."

Marc Zabicki, Chief Investment Officer

LPL Research

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*As of May 2026

**As of Annual Outlook Report 2026

Disclosure

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.​
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Asset allocation does not ensure a profit or protect against a loss.

All index data from FactSet.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This research material has been prepared by LPL Financial LLC.

Not Insured by FDIC/NCUA or Any Other Government Agency

Not Bank/Credit Union Guaranteed

Not Bank/Credit Union Deposits or Obligations

May Lose Value

 

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