The Long View: Not a Straight Line

Markets often pause after strong gains, but this recent consolidation looks more like a breather than a warning sign. The U.S. economy appears resilient, with the labor market improving, oil prices easing and recession signals still broadly green.

That backdrop should support consumer spending and corporate profits into the second half of 2026. Valuations remain elevated, so earnings growth will need to keep doing the heavy lifting, but that has been enough to drive the rally so far.

Lower inflation pressure could also help Treasury yields drift lower and give equities another lift. Midterm election uncertainty may add volatility, yet strong earnings expectations suggest 2026 could still defy typical seasonal patterns.