Broadening momentum: From US technology leadership to US small caps and emerging markets

Global equities have delivered solid gains, yet the backdrop still supports a rotational bull market that could extend into 2026. Steady US growth, moderating inflation and ongoing Fed rate cuts are creating a more supportive setting for earnings and risk assets, with many emerging markets likely to follow with their own easing cycles. In this environment, leadership is expected to broaden beyond the largest US technology names toward areas that have lagged but now offer compelling value.

US small caps appear well positioned as lower borrowing costs ease past pressures on profitability and historically attractive valuations provide room for recovery. Emerging-market equities also stand out, with cheaper currencies, improving funding conditions and stronger projected earnings growth than many developed markets pointing to meaningful upside potential for investors willing to increase exposure.