3 Market Trends That Could Shape the Rest of 2026

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• The S&P 500 has already fallen 9% and rebounded 12% in just the past couple of months, demonstrating that investors are still trying to get a handle on what to expect

  60% confidence

• A swift resolution to the Middle East conflict could bring inflation back down and reopen the door for Federal Reserve rate cuts

  60% confidence

• March 2026 inflation came in at 3.3% year over year, much above February's 2.4%

  60% confidence

• The Iran war has turned inflation expectations upside down, with the March 2026 inflation rate shooting up to 3.3%

  60% confidence

• Earlier in 2026, the US unemployment rate was 4%-5% and the economy was growing at a healthy clip, supporting the case for rate cuts

  60% confidence

• An inflation rate in the 3%-4% range makes it very difficult for the Fed to cut rates even if the economy begins slowing more rapidly

  60% confidence

• Stock prices historically have rebounded strongly once the midterm election has passed

  60% confidence

• The VIX briefly hit the 30s in 2026 but volatility has since moderated, which could reduce the potential for above-average returns going forward

  60% confidence

• Midterm election years historically feature the lowest stock market returns of the four-year presidential cycle

  60% confidence

• The AI narrative, while still present, has moved to the background in 2026 as the Iran war, inflation, and geopolitical tensions displace it as the dominant investor concern

  60% confidence

• Earlier in 2026, markets had priced in roughly one or two Federal Reserve rate cuts for the year

  60% confidence

• The March 2026 inflation reading will complicate the Federal Reserve's path toward interest rate cuts

  60% confidence

• The futures market is currently pricing in a 1-in-3 chance of a Federal Reserve rate cut in 2026

  60% confidence

• The past few years featured just one dominant market theme — artificial intelligence — driving stock market winners, economic growth figures, and earnings expectations

  60% confidence

• The Federal Reserve looks like it is going to be stuck and unable to cut rates given the current inflation environment

  60% confidence

• April 2026 inflation may go even higher than March's 3.3% reading

  60% confidence

Cited in these Via News reports

• AI Cloud ETFs Drop Up to 22% as Stagflation Locks Central Banks From Washington to Frankfurt →
• AI Cloud ETFs Slide Up to 22% as Five Central Banks Hold and Warsh Nomination Reshapes Fed Outlook →
• Cloud and AI ETFs Crater Up to 22% YTD as US Inflation Kills Global Rate-Cut Hopes →
• G-7 Central Banks Freeze in Sync as Hawkish Warsh Set to Cement Fed's Tighter-for-Longer Stance →
• Global Rate Surge Outlasts Powell: Banks on Three Continents Face Higher-for-Longer Reality →
• Powell Out May 15: Warsh Takes Fed Helm as G-7 Banks Hold Rates and Markets Price Out 2026 Cuts →
• Powell Out, Warsh In: Global Rate-Cut Dreams Die as US CPI Holds at 3.8% →
• U.S. CPI Surges to 3.3% on Iran War Energy Shock, Crushing Cloud and AI ETFs Globally →
• UK Gilt Yields Hit 5.10% as JPMorgan Forecasts 3–5% Banking Surcharge →
• Warsh Takes Fed Chair With U.S. CPI at 3.8% as ECB Eyes Hikes and Global Rates Stay Elevated →