Our outlook characterizing 2026 as the “show me” year has largely delivered. Investors have been shown tangible evidence that artificial intelligence (AI) can improve productivity, support earnings growth and reshape business investment. The challenge is no longer to prove that AI-driven transformation is underway; rather, it is to determine whether the benefits are broad, durable and timely enough to justify the expectations already embedded within current asset prices.

In this edition of Strategy Insights, we analyze the balancing act of key market drivers — AI investment, debt and interest rates, geopolitical and inflation risks and the U.S. midterm elections — and provide our perspectives on portfolio positioning for the path ahead.

While we continue to see opportunities supported by the AI innovation cycle and economic productivity, the range of possible outcomes remains unusually wide. Ultimately, we believe markets are grappling with whether an increasingly uncertain macroeconomic backdrop can support the expectations built around AI-driven growth and investment.

FOR AN IN-DEPTH LOOK
Strategy Insights Fourth Quarter 2026