Entering 2026, almost every analyst forecasted that equity markets would experience a rise throughout the year. Will they be right?

Fueled by the optimism that characterized 2025, in late January 2026, the S&P 500 reached new highs. As the quarter progressed, the favorable backdrop began to shift from momentum to volatility. Rising geopolitical tensions––particularly in the Middle East–– introduced a new wave of uncertainty. At the same time, evolving expectations around the Federal Reserve’s policy path added to investor concern.

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