Markets Broaden as Policy Eases, Valuations Test Discipline

This report, produced by Capital Group’s investment and economics teams, outlines a long-term outlook for global markets heading into 2026, balancing opportunity against elevated risk. 

• Global growth shows resilience as easing monetary policy, lower-than-feared tariffs, and fiscal stimulus support earnings across regions, with non-U.S. equities and emerging markets gaining momentum.

• Equity leadership is broadening beyond mega-cap U.S. tech, while AI investment remains a powerful but valuation-sensitive driver.

• Higher yields restore bonds’ role as income and portfolio ballast, though tight credit spreads demand selectivity.

What does a more balanced market regime mean for portfolio construction in the years ahead?