Years of reading Wall Street research firms’ and economists’ forecasts for things like inflation, the job market, stocks, and more have taught us at least one thing:
Wall Street research firms’ and economists’ forecasts are frequently wrong.
And that seems like an odd way to tee up our look at the pros’ forecasts for the rest of 2026 … well, you’re right. But hang around. Maybe we’ll surprise you.
Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.
OK. Expert Predictions Are Useful, But …
Before we get any farther, let’s be clear: We’re not dogging financial and investment experts. Far from it.
But we are saying that it’s a difficult task to predict anything, let alone what hypercomplex structures such as the global economy or the stock markets will do within a given time frame.
Case in point? We just went back through late December’s outlooks for 2026, and we saw a lot of calls for …
- Easing Federal Reserve policy (nope!)
- Above-average economic growth (not yet!)
- A continued rise in gold (it did, before getting flattened).
Oil prices? They something of an afterthought, and the pros generally expected them to remain flattish.
That’s a lot of wrong … but look at what it took! In the first few months of 2026, we got two major surprises in the form of renewed tariff aggression and the U.S.-Iran war. Completely unknowable unknowns.
What’re you gonna do?
But to their credit, the pros also got plenty of things right:
- We were told that AI infrastructure would proliferate, and it has.
- We were also told that this would tighten U.S. power markets, and it has.
- Plenty of research outfits thought the setup for small caps was ideal, and so far this year, the small-company S&P 600 has indeed doubled the S&P 500—which, by the way, is itself on track for an above-average year.
Related: 14 Best Investing Research & Stock Analysis Websites [2026]
Why, then, if the pros are so hit-or-miss, should we care about what they think will happen next? Because it helps us know where to look and what to look for.
Stock researchers and economists will often collectively home in on certain themes. Happens all the time. Maybe they’ll largely agree with one another, or maybe they’ll be split. That doesn’t matter so much as the fact that there’s some there there—and thus, we should be paying attention and trying to learn more.
I’m not just suggesting this to day traders looking to identify their next big move. For many buy-and-hold investors, it can be helpful to understand what’s driving your portfolio higher or lower at any moment in time, because knowledge tends to tamp down fear, which in turn may keep you from making investment choices you regret.
And even if you don’t invest at all, it can pay to understand what’s going on with consumer prices, interest rates, the housing market, and more.
Put succinctly: Outlooks’ utility isn’t as accurate predictions about the future (they’re not), but instead as “points-of-interest” maps.
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10 Experts, 10 Outlooks
With that in mind, let’s take a look at 10 different research outlooks on 10 different areas of the economy or investment markets.
1. Inflation (Morgan Stanley)
I’ll start with a pair of economic issues that frequently flow into the markets: inflation, then interest rates.
On the former, says Morgan Stanley …
“We forecast deceleration in both headline and core PCE inflation. We believe tariff pass- through is ending, paving the way for substantial disinflation in core goods over the next year, and oil prices have retreated. In addition, we look for further moderation in shelter inflation and some payback from residual seasonality into year end.
Interestingly, in our latest AlphaWise survey of ~2,000 U.S. consumers (conducted June 18-22), respondents said higher prices on groceries (67%), overall cost of living (66%), and gas (56%) are the main factors contributing to financial strain. However, 22% of respondents said their ability to cover monthly expenses and debt payments has improved versus last year, while 45% reported no change and 33% indicated a deterioration.”
Related: The 10 Best Fidelity ETFs You Can Buy [Invest Tactically]
2. Interest Rates (BofA Global Research)
However, BofA Global Research doesn’t think there’ll be enough of a deceleration in inflation to stay the Federal Reserve’s hand.
“Fed [interest-rate] hikes are now on the horizon: The global economy will likely be tested by tighter financial conditions emanating from the U.S. The labor market firmed up and inflation dynamics have deteriorated in the U.S. While some one-offs are partly to blame, and tariffs should soon roll off, most of the FOMC seems to be losing patience after 5 years of high inflation. We have been clear that the economy was not asking for cuts and there is a lot of uncertainty on how the Fed will operate, but we now expect 75bp of Fed hikes this year, starting in September.
Related: Empower Personal Strategy Review: Wealth Management More People Can Afford
3. S&P 500 (JPMorgan Chase)
Now, let’s look at several equity calls for the rest of 2026. First up is JPMorgan Chase, which has raised its year-end price target. (For context, the S&P 500 closed July 9 at 7,543.64.)
“At the start of the year, our equity view was very constructive on the back of the U.S-led [artificial intelligence] supercycle, with consensus earnings growth year-to-date revised higher to ~20% on average for the next two years—an unprecedented positive revision, in parallel to a near doubling of AI capex.
Against this backdrop, we are increasing our S&P 500 year-end price target to 7,800 and raising our 2026 S&P 500 [earnings per share] estimate to $350 (+29% y/y). For 2027, we remain constructive but expect EPS of $390 (+15% y/y). That said, the path higher is likely to be non-linear given a tougher bar into second-quarter earnings, crowded Momentum positioning (especially Low Quality and Speculative Growth segments) that continues to face high probability of a flash-crash, rapidly increasing equity supply, and potentially tighter monetary policy that could constrain equity multiples.”
Related: The 13 Best Mutual Funds You Can Buy Right Now
4. Small-Cap Stocks (Wells Fargo Investment Institute)
The Wells Fargo Investment Institute isn’t nearly so sanguine about smaller companies.
“We see less upside for U.S. small-cap equities [than large and mid-caps] through year-end 2026 and maintain our unfavorable rating. Even assuming modest economic growth, the combination of higher interest rates, higher labor-cost sensitivity, and limited pricing power may constrain earnings visibility for smaller firms. AI adoption has the potential to enhance productivity but introduces disruption risk that disproportionately affects companies with narrow business models and limited capital buffers. Lack of balance-sheet diversity may also weigh on these companies when policy uncertainty arises.”
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5. Stock Sectors (CFRA)
Independent research firm CFRA provides us with a quick sector-level look at the U.S. stock market:
“Sector recommendations are based primarily on the comparative target-price projections of the constituent companies within each of the S&P 500’s 11 sectors versus the S&P 500, along with the percentage of stocks with favorable investment recommendations (CFRA 4-STARS or 5-STARS), combined with the market-cap- weightings of these recommendations. The sector’s price momentum and historical performance during similar economic/political periods are also considered. CFRA recommends overweighting the Industrials and Information Technology sectors, while underweighting the Energy, Materials, and Real Estate groups.
Overweight: We see Industrials benefiting from a structural capex super-cycle that is anchored in AI data center buildouts, defense spending, and manufacturing reshoring. For Information Technology, positives include AI infrastructure buildouts, strong EPS growth, and improving capex visibility.
Underweight: Energy is seen underperforming. This sector should underperform due to a U.S./Iran truce. WTI oil prices are expected to fall to the $60-$70 per barrel range. The Materials sector continues to carry a below- market STARS ranking, as well as elevated absolute and relative valuations. Real Estate should experience ongoing fundamental challenges in key commercial real estate segments.”
Naturally, the energy forecast is contingent on the U.S.-Iran ceasefire holding, which, as I’m writing this, doesn’t look great.
Related: Best Target-Date Funds: Fidelity vs. Schwab vs. T. Rowe vs. Vanguard
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6. Theme: Energy Scarcity (BlackRock)
Speaking of which, BlackRock notes that Iran is just one of several events that have shone an increasingly bright light on the issue of energy scarcity.
“Accelerating geopolitical fragmentation is raising the cost of securing strategic inputs economies need to grow. Strategic competition, conflict and self-sufficiency initiatives are exposing supply risks just as AI lifts power demand from already constrained systems. … Many governments and companies are prioritizing resilience as supply chains become instruments of national power.
U.S.-China competition sits at the center, cutting across trade, technology, energy and defense as both sides seek greater control over key inputs. The COVID-19 pandemic exposed the fragility of long, complex and dispersed supply chains; wars in Ukraine and the Middle East reinforced it. That is raising the value of secure access.
Energy is the most visible expression of this secure-supply and resilience investment theme. Countries are racing to secure fuel supply today and build power systems for the future amid heightened strategic competition. The opportunities run well beyond oil and gas, from fuels and critical materials to power equipment and storage—and that’s increasingly reflected in market pricing.
Case in point: Companies positioned to benefit from rising electricity demand have outperformed in the past year, as the chart shows. The opportunity is not in broad energy, but in exposures to secure supply, infrastructure and power system bottlenecks across public and private markets. We evolve our mega force to “energy transition and resilience” to reflect this.”
Related: 5 Best Energy ETFs for the Rise of Oil, Natural Gas + More
7. Theme: Artificial Intelligence (Janus Henderson Investors)
Artificial intelligence has bled into many areas of the market, so it’s worth looking at the AI theme itself. Janus Henderson Investors gives us an overview, then looks at three considerations for would-be AI investors:
“AI infrastructure demand is outpacing supply, and capital expenditure across hyperscalers is expected to reach $837 billion for 2026. Meanwhile, U.S. productivity rose 2.9% year over year in Q1, the strongest increase in two years, suggesting AI adoption is showing in the data. These trends point to compelling growth prospects in companies supporting the AI buildout and those integrating AI into core operations.
But AI is also creating disruption, particularly agentic AI, which can tackle production-level workloads. … Deep research and active stock selection will be key as the divide widens between companies able to harness AI for foundational advantages and those vulnerable to disintermediation.
- Infrastructure: The AI buildout has extended into power, utilities, materials, and energy. A cumulative $106 trillion will be needed for new and updated infrastructure through 2040.3 Demand is already exceeding supply across semiconductors, memory, cooling systems, optical, and power equipment. Companies operating at these bottlenecks, where capital expenditure shows no sign of slowing, merit consideration.
- Evaluate disruption risk: Some companies are using AI to strengthen their business, while others risk being left behind. As software becomes cheaper and AI tools more capable, undifferentiated business models face growing pressure. Companies with sustainable competitive moats, specialized products, unique data, high customer- switching costs, or complex regulations appear better placed.
- Be selective at the company level: Businesses are taking different approaches to AI adoption, automation, and monetization, which will likely equate to wider gaps in earnings and share price performance. In this environment, it will be critical to harness expertise to determine the quality of a company’s AI strategy, the credibility of its path to earnings growth, and the strength of its competitive position.”
Related: 7 Best AI ETFs for the Artificial Intelligence Era
8. Emerging-Market Stocks (Invesco)
What about outside the U.S.? Well, in addition to the international players involved in the themes above, researchers’ optimism generally coalesced around emerging markets (faster-growing but riskier nations). Says Invesco:
“If we are correct and the U.S. dollar weakens this year, we expect equities and non-U.S. markets to perform well, especially emerging markets. Emerging-market assets should benefit from global reacceleration, some from rising commodity prices, others from exposure to the AI theme—and many still offer attractive valuations, in our view.
In our 2026 outlook, we expected emerging market (EM) assets to continue outperforming. That was predicated on our belief that the global economy would accelerate, that Fed easing would weaken the U.S. dollar, and our view that EM assets have relatively attractive valuations. The closure of the Strait of Hormuz has complicated matters. The surge in energy prices is to the benefit of energy-exporting EM countries but could be a problem for energy importers, especially many countries in Asia. Further, the Fed, along with other central banks, has put easing on hold and the dollar has strengthened a little. This, along with concerns around global growth, could well have derailed the performance of EM assets. However, any disruption to EM assets appears to have been short-lived.
We also expect the Fed to recommence its rate cuts during the second half of the year, which we think will cause the dollar to weaken further (a factor that has tended to support EM asset performance). In general, emerging markets have been more resilient than feared. In our view, their fiscal positions are often better than some developed markets, their central banks have greater scope to cut rates, and inflationary pressures are less acute.”
Related: 7 Space ETFs for the Next Frontier of Investing
9. Fixed Income (Franklin Templeton Institute)
For those more interested in fixed income, here’s what the Franklin Templeton Institute has to say about bonds and other debt:
“Earlier in 2026, markets expected the Federal Reserve (Fed) to deliver a series of interest rate cuts. Instead, renewed inflation pressures … have changed those expectations. Investors now see the possibility of at least one Fed rate hike before year-end. Similar dynamics are playing out globally, with both the European Central Bank and the Bank of Japan already tightening policy and signaling a willingness to raise rates further if needed to prevent inflation from becoming entrenched.
As a result, expectations of steepening yield curves no longer characterize fixed income markets. Instead, investors are confronting a period of ‘bear flattening,’ in which shorter- term yields rise more rapidly than longer-term yields.
While this environment presents challenges for duration-sensitive investors, it also creates attractive income opportunities, particularly in the short- and intermediate-maturity segments of government bond markets where nominal and real yields are compelling. Corporate bond markets also remain attractive. Strong corporate profitability and healthy balance sheets suggest that credit spreads should remain relatively stable despite changing expectations for central bank policy. Consequently, investors can benefit from higher levels of income without assuming excessive credit risk.
Within credit markets, U.S. high-yield bonds are particularly appealing, offering all-in yields above 6% with minimal duration exposure. Emerging market debt provides another promising source of income. A stable U.S. dollar is attractive, particularly when combined with elevated nominal and real coupon rates, and particularly in select Latin American markets, above all in Brazil.”
Related: 8 Best-in-Class Bond Funds to Buy
10. Housing (Goldman Sachs Research)
Lastly, let’s look at an area of the economy that could impact many readers over the next few months: the housing market. From Goldman Sachs Research:
“Sustained higher mortgage rates will continue to have their most pronounced impact on housing turnover. Almost 80% of mortgage borrowers have interest rates below current market rates, and almost 60% have rates 2 percentage points below market rates, strongly disincentivizing them from moving. We expect annualized existing home sales of just 4.2mn in the second half of 2026, 3% above the pace of the first half of 2026 but 22% below 2019.
The longstanding housing shortage has kept single-family homebuilding extremely resistant to higher interest rates, but normalizing supply-demand balances and margins for homebuilders have led to a moderate slowdown in single-family housing starts. Single-family starts have declined by 2% so far this year compared to last year but have averaged 4% above 2019 levels despite mortgage rates [that are 3 points higher] today. We expect single-family housing starts to total 0.92mn this year (vs. 0.94mn in 2025) and to end the year around a 0.93mn annualized pace.
We expect housing demand to remain tepid. On the positive side, domestic demographic trends remain supportive, and survey-based measures of purchase intentions have improved. But on the negative side, reduced immigration will continue to weigh on household formation, and income growth is poor. The combination of still-solid supply growth and slightly weaker demand should push the homeowner vacancy rate higher. Against the backdrop of an easing housing market, we expect national home prices to rise just 0.8% December-over-December this year and 2.3% next year.
With new lease rents growing just 1-2% over the last year and the gap between rents for new and continuing leases having already narrowed beyond its pre-pandemic level, we expect monthly [personal consumer expenditures] shelter inflation to average just 0.19% over the rest of this year and for the year-on-year rate to fall from 3.2% today to 2.9% by December 2026 and 2.2% by December 2027.”
Related: The 7 Best REITs to Buy for the Rest of 2026
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