Stock market outlook: 3 themes for the second half of 2026

Stock markets in 2026 are being powered more by earnings than by sentiment, and that strength appears to be holding up despite geopolitical tension, inflation pressures and volatile energy prices.

The AI build-out remains a major engine of growth, but the opportunity is broader than U.S. megacap technology because it is also lifting semiconductors, networking firms and the suppliers that support data centers and power demand.

Non-U.S. equities look increasingly compelling as well, with attractive valuations, a weaker dollar backdrop and strong earnings prospects in emerging markets and select developed-market leaders.

At the same time, the physical economy deserves attention because companies tied to infrastructure, industrial equipment, travel and healthcare can benefit from real-world spending while offering some diversification from AI-heavy exposure.