Midyear Outlook

Looking back at the first half of 2026, markets faced some challenges expected by investors, and some that were unexpected. A new Federal Reserve (Fed) chair stepped into one of the most difficult monetary policy environments in years. Conflict in the Middle East pushed oil prices sharply higher and sent ripples through global markets. And a technology spending boom, unlike anything seen before, began reshaping the corporate landscape in ways that are still playing out.

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Through it all, stocks climbed, the economy kept growing, and corporate profits surprised meaningfully to the upside. As we turn our attention to the second half, we remain constructively optimistic. Optimistic because the fundamental drivers of this bull market, including real earnings growth, artificial intelligence (AI) execution, and a resilient economy, remain intact. Cautiously constructive because we recognize that markets have already priced in a great deal of good news, and that the months ahead will bring their own set of tests, from a new Fed chair navigating a tricky inflation environment to the approach of midterm elections in November.

LPL Research created this report so you and your financial advisor can apply these insights to your goals and aid in finding the right balance for your portfolio.

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