Schwab Center for Financial Research Reveals Its 2026 Market Outlook
Schwab’s Market Perspective: 2026 Outlook
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“We believe the macro environment will continue to be unstable given policy crosscurrents and a wobbly labor market, but stocks can likely churn higher given a firmer earnings backdrop. We think rebalancing based on volatility, as opposed to the calendar, makes sense, as will continuing to lean into more profitable segments of the market.”
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“Overall, we expect 2026 to be another good year of returns for bond investors, but the range of potential outcomes remains wide. We continue to favor a middle-ground strategy—up in quality and intermediate-term average duration—that may help mitigate some of the risks while allowing for potentially attractive returns.”
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“We continue to suggest an up-in-quality fixed income bias for the short run, but investors can still consider some of the riskier parts of the fixed income market in moderation. For now, we prefer high-quality investment-grade corporate bonds given their balance of low-to-modest credit risk.”
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“We believe municipal bonds will continue to offer attractive tax-adjusted yields in 2026, while credit quality should remain stable. In our view, munis can be an attractive investment option for investors in higher tax brackets looking for relatively conservative investment options and we don't expect that to change in the near future.”
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“International stocks could be poised for another strong year in 2026 due to a cyclical sector orientation that could benefit from an acceleration in global growth, earnings growth accelerating and catching up with the
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“With interest rates stabilizing, inflation trending toward target ranges, and volatility reverting to long-term norms, investors who anchor decisions to true time horizons rather than short-term noise continue to make more rational, durable choices that are affected less by emotions.”
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Learn more about Schwab’s Market Perspective: 2026 Outlook and 2026 Wealth Management Outlook.
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Disclosures:
The information here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of securities and investment strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction for his or her own particular situation.
Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.
Investing involves risk, including loss of principal. International investments involve additional risks, which include differences in financial accounting standards, currency fluctuations, political instability, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.
Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors. Lower rated securities are subject to greater credit risk, default risk, and liquidity risk.
Tax-exempt bonds are not necessarily a suitable investment for all persons. Information related to a security's tax-exempt status (federal and in-state) is obtained from third parties, and
The policy analysis provided by the
Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.
Forecasts contained herein are for illustrative purposes only, may be based upon proprietary research and are developed through analysis of historical public data.
All expressions of opinion are subject to change without notice in reaction to shifting market conditions.
The information and content provided herein is general in nature and is for informational purposes only. It is not intended, and should not be construed, as a specific recommendation, individualized tax, legal, or investment advice. Tax laws are subject to change, either prospectively or retroactively. Where specific advice is necessary or appropriate, individuals should contact their own professional tax and investment advisors or other professionals (CPA, Financial Planner, Investment Manager) to help answer questions about specific situations or needs prior to taking any action based upon this information.
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Charles Schwab
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