3 Market Trends That Could Shape the Rest of 2026
The S&P 500 index has fallen 9% and rebounded 12% in recent months as investors navigate uncertainty around inflation and the midterm elections. The March inflation rate was 3.3% year over year, complicating the Federal Reserve's path toward rate cuts.
The market narrative is shifting from artificial intelligence to concerns around inflation, geopolitical tensions, and the midterm elections. The S&P 500 index has experienced significant volatility, falling 9% and rebounding 12% in recent months. The March inflation rate was 3.3% year over year, much higher than February's 2.4%, making it difficult for the Federal Reserve to cut rates. Historically, midterm election years have the lowest returns of the four-year cycle, averaging 4.6% since 1950. However, the S&P 500 tends to rally strongly after the election, averaging a 30% increase 12 months after the intrayear low. Volatility has moderated since March, potentially limiting above-average returns.
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