Despite the financial markets’ turbulent year, US stock investors are looking forward to 2026. In the spring, markets were rocked by US President Donald Trump’s international trade tariffs. However, by summer, record highs were reached in the US thanks to robust corporate profits and investor confidence in AI.
For the third year in a row, the S&P 500 index is expected to close the year up almost 17%. Analysts predict that next year will be yet another significant one for stock investors. However, the future may be difficult due to changes in the US central bank’s leadership and growing worries that AI stocks are overpriced. The Russell 2000 index of smaller companies has up around 12% so far this year, while the technology-heavy Nasdaq Composite index is expected to gain 21%.
When Trump imposed broad tariffs on US trading partners in early April, the S&P 500 dropped to the verge of bear-market territory, defined as a 20% decline from the most recent high. The Russell 2000 and Nasdaq Composite indexes did experience a brief decline into bear markets. However, after Trump withdrew his highest duties, key indices swiftly recovered, allaying Wall Street’s concerns about a tariff-driven economic slowdown.
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