As 2025 comes to a close, many financial professionals are turning to market forecasts from top financial firms to gain insights into what’s ahead for 2026. The forecasts from these three top firms will help you make informed investment decisions for your clients.
From Wells Fargo Investment Institute
The conviction expressed in Wells Fargo Investment Institute’s “2026 Outlook report: Trendlines over headlines, is that growing technology spending, Federal Reserve interest rate cuts, deregulation, and tax incentives collectively will push past headline noise to shape a 2026 investment landscape that should draw investor attention.
These trends may support each other, the report said. Business tax cuts for capital spending should promote business expansion and modernization. In addition, lower borrowing costs and deregulation could promote hiring, raise worker productivity, reduce production costs and inflation, while raising earnings growth and potentially expanding equity market breadth.
“While market volatility and pullbacks remain possible, the trends outlined in our report provide a strong foundation for long-term growth and portfolio diversification,” said Darrell Cronk, chief investment officer for Wealth & Investment Management. “Rather than reacting to daily headlines, we encourage investors to tune out the noise and focus on the fundamental signals shaping tomorrow’s investment landscape — policy tailwinds, technological transformation, and expanding opportunities across asset classes.”
What WFII favors
The organization said that it favors large- and mid-cap equities, industrial and precious metals, and a complementary full international equity allocation. At the same time, lower short-term rates and a modest expected increase in longer-term yields favor intermediate (3-7 years) maturities in investment-grade securities. Lower interest rates and new tax advantages should reinforce the strong technology and artificial intelligence spending trend, the report added.
WFII favors staying invested in that trend but focusing on valuations in order to avoid chasing overextended stocks. Additional diversification and flexibility may come from select hedge fund strategies and private capital strategies, such as private equity secondaries, infrastructure, and small and midcap buyout.
Investment ideas for 2026
The organization then shared five investment ideas for 2026:
- Focus on technology’s potential for seismic change.
- Consider learning more about digital assets as a potential opportunity.
- Complement U.S. equity bias with international opportunities.
- Position portfolios for lower short-term rates.
- Harness the noise-reducing potential of alternatives and private assets.
Highlights of WFII’s forecast
The organization also shared the following highlights:
- The anticipated U.S. gross domestic product growth target is 2.4% for 2026.
- The target for U.S. consumer price inflation in 2026 is 2.8%.
- The S&P 500 Index price target range is 7,400 – 7,600 for 2026.
- Federal funds rate target is 3.00% – 3.25% for 2026.
A summary of the WFII 2026 Outlook is available (PDF).
TransAmerica Asset Management Inc.’s view
TransAmerica believes that the U.S. economy is capable of approximately 2% cumulative gross domestic product (GDP) growth in the year ahead. This is driven by positive consumer spending, business fixed investment, and the potential tailwind of lower interest rates. The company sees inflation remaining somewhat sticky in the range of about 3%, as defined by the combined average of personal consumption expenditures (PCE) and consumer price index (CPI) core rates.
All considered, the company would view the economic environment as remaining favorable for both stocks and investment-grade corporate bonds. The Federal Reserve is likely to continue reducing rates, and it sees calendar year 2026 likely concluding with a Fed funds target range of 3.00%–3.25%.
The company also sees further upside for U.S. stocks, and its year-end 2026 price target on the S&P 500 is 7,400. Intermediate- and long-term catalysts include corporate earnings growth, Federal Reserve rate cuts, a positive growth in the economy, and a “lower for longer” tax environment. With comparative valuations remaining close to historic discounts for U.S. stocks, it continues to like the profile of large-cap value stocks.
Wild cards for the year ahead include market sentiment regarding artificial intelligence (AI), the pending appointment of a new Federal Reserve chair, more potential tariff drama, and the mid-November elections.
From Morgan Stanley
Highlights from Morgan Stanley include:
–U.S. stocks are likely to outpace their global peers, with the S&P 500 projected to gain 14 percent over the next year.
–Government bonds—particularly in the U.S.—are likely to rally in the first half of the year as central banks shift from inflation control to policy normalization, but decline in the second half.
–Massive capital needs for AI infrastructure and M&A deals should drive corporate bond issuance in the U.S. and Europe.
The company added that after policy and macroeconomic uncertainties dominated most of 2025, the investment landscape is shifting toward a more favorable environment, particularly for risk assets.
Companies and economies are likely to benefit from AI-related productivity gains, while global disinflation and growth should converge toward a sustainable pace in 2027—with potential for further upside.
An ‘unusually favorable policy mix’
In this environment, Morgan Stanley Research recommends an overweight position in stocks, equal-weight in fixed income and underweight in commodities and cash, with a strong preference for U.S. assets.
“The triumvirate of fiscal policy, monetary policy and deregulation are all working together in a way that rarely happens outside of a recession,” said Serena Tang, Morgan Stanley’s chief global cross-asset strategist. “This unusually favorable policy mix allows markets to shift focus from global macro concerns to asset-specific narratives—particularly those related to AI investments.”
Higher gains for U.S. stocks
In addition, U.S. equities should outperform global peers in 2026, with the S&P 500 rising to 7,800 in the next 12 months—a 14% gain from its current level. According to the report, U.S. earnings and cash flow growth are poised to benefit from several factors, including a market-friendly policy mix, interest-rate cuts by the Federal Reserve, a reduction of $129 billion in corporate tax bills through 2026 and 2027 from the One Big Beautiful Act, positive operating leverage, the re-emergence of pricing power and AI-driven efficiency gains. “There will be some bumps along the way, but we believe that the bull market is intact,” Tang said.
What consumers think about 2026
Meanwhile, a survey from CFP Board is shedding some light on what consumers are thinking about 2026. According to the survey, CFP professionals reported that Americans working with CFP professionals are approaching 2026 with cautious optimism and strong confidence in achieving their financial goals, even as uncertainty dominates financial planning conversations.
The political environment has emerged as the primary concern that clients are raising with their advisors, the report said. Half of CFP professionals reported that clients mention this concern in relation to reaching their financial goals — surpassing concerns like inflation and prices (39%), the national economy (34%) and market stability (34%). Still, the survey finds that nearly half (49%) of clients have a positive outlook for the year ahead. And confidence in their financial plans is high, with 80% expecting to achieve long-term goals and 72% expecting to reach short-term goals.
Client emotions about 2026 reflect the complexity of the moment, the report said. While 36% feel optimistic and 24% feel confident, many describe themselves as cautious (53%), uncertain (43%) or anxious (36%).
What actions clients are taking
Regardless of their individual outlook, clients are taking action, the survey said. Nearly half (48%) of CFP professionals said their clients are more likely to increase investment levels in 2026, while many are also planning home repairs or renovations (40%), vacations (35%) or retirement (39%).
CFPs’ 2026 planning conversations
So, what areas are CFP professionals focusing on? According to the report, they are focusing their 2026 planning conversations on retirement planning (67%), tax planning (58%), investment planning (51%), estate planning and wealth transfer (44%), and health-care costs (30%).
And in response to the current environment, two-thirds of CFP professionals are recommending that clients focus on tax optimization (69%) and developing or revising their financial plan (62%). Additional top strategies include increasing retirement savings (44%) and investing in the stock market (38%).
On November 6, 2025, the CFP Board’s Research team sent a 10-question survey to CFP professionals. The survey generated responses from 541 CFP professionals when it closed on November 20, 2025.
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