The major rating company assesses: Which economy will grow the most in 2026?

At Fidelity, one of the largest and oldest asset management companies in the world, a volatile year is expected but those who stay in the market may profit big time. In their estimation, companies are just starting to see the benefits of the new US corporate tax breaks passed in 2025, which could add to earnings momentum. In addition, they mention the cycle of interest rate cuts in the US, with further reductions on the agenda.

1Earnings growth will become healthier: Fidelity reviews the profitability behind the performance of the stock market in 2025 and analyzes that it shows no signs of decline. “There are also signs that the earnings picture is becoming healthier, with a wider range of companies participating in the growth,” they note. In their estimation, in the coming year we will see stronger growth for companies that are not in the technology field and for smaller companies.

At the same time, the tax reform passed by Trump in 2025 is expected to significantly increase the profits of companies and the purchasing power of consumers.

2Potential noise – talk of an “overpriced” market: By many measures, US stocks are not cheap. The S&P 500’s forward earnings multiple recently stood at 21.95, compared to an average of 18.7 over the past decade. Fidelity estimates that if valuations remain high, speculation about a “bubble” or a correction will increase. However, they emphasize that a high valuation does not in itself cause declines. Trust” in the profitability of the companies in the future.

3The forces that support the devaluation of the dollar: Fidelity emphasizes that movements in currencies are very difficult to predict in the short term, but it seems that the forces that led to the decline of the dollar in 2025 so far remain in place, and may lead to further devaluation in 2026. Among other things, they mention that central banks have begun to diversify their large holdings in US government bonds, and that the world is moving from American dominance to a “multipolar balance of power”. For investors, a weak dollar is expected to increase returns on stocks outside the US and improve the bottom line of American companies operating abroad.

4AI bubble? The situation is far from dot.com: Fidelity believes that the enthusiasm in the markets for the field of AI may eventually lead to excessive valuations and profitability difficulties, but compared to the Internet bubble of the late 1990s, the current situation seems “at a very early and benign stage.” When will we know there is cause for concern? The answer from a Fidelity economist is weeks “exploding when the skeptics, those who predicted its arrival and sold too early, succumb to the ‘fomo’ and return to the market just at the peak”.

5The forces below the surface: Alongside the optimism, Fidelity points to structural risks that may surface in 2026: the erosion of the Fed’s independence, especially towards the end of Chairman Powell’s term in May, the return of inflation and difficulty in financing the American debt. In their estimation, the “fault lines” intersect in the government bond market which will be the first to signal a crisis.

Why pay attention? If the Fed lowers interest rates contrary to economic data (for political reasons, for example), investors will demand higher yields as compensation for inflationary risk. Fidelity points to a 5% return on 10-year bonds as a critical threshold. Approaching this level in the past ignited waves of sales in stocks due to the pressure on valuations.

City: Neither hot nor cold – a year like gold’s porridge

The investment giant Citi predicts that the global growth trend will continue in 2026, at a rate of 2.7%. The title of the forecast is “The performance of ‘Gold and the Three Bears’, but the risks remain”. The meaning is the porridge in the story, not too hot and not too cold: “Optimism may be too strong a word, but we at least feel a degree of comfort regarding the forecast for 2026, in complete contrast to our more gloomy estimates from recent years,” they wrote.

Bottom line, Bessiti is optimistic about the stability of the global economy, but cautious about the pricing of the American market. The opportunities may be in other markets such as the UK, the dollar, and metals such as copper and aluminum.

1The economies that will grow and those that will slow down: Performance will improve slightly in South Korea, Australia, Sweden and Poland; will increase but remain moderate in Germany and Mexico; And will be softer in India, China, Singapore, Spain and Brazil. In aggregate, Citi expects a moderate slowdown in growth in developed markets from 1.7% to 1.6%, and from 4.2% to 4.0% in emerging markets.

2The caps are less scary: Trump’s tariff policy has somewhat changed the global economic order in 2025, but Citi writes that the effects “were also less severe than we predicted. Considering what we have seen, we are skeptical that tariffs at this stage will deliver a disruptive blow to global growth or inflation, and we assess the risk of a recession as low.”

3Don’t expect a rally in the S&P 500: It is estimated that the American flagship index will reach a level of 6,900 points by mid-2026. A very moderate increase from today. They also present a similar forecast for the European Stoxx 600 index. However, they remain optimistic that the positive trend in the markets will continue in the medium term. It is estimated that at the global level the earnings per share (EPS) will increase by about 11%, with all regions and key sectors contributing positively. The UK and emerging markets show the most “bullish” positioning.

4The dollar will strengthen, and also two metals: The research department estimates, contrary to the consensus, that the American currency will strengthen by about 6% against the euro until the middle of 2026, to a rate of 1.1. The explanation: a renewed acceleration in the US that the markets are not pricing. In their estimation, the demand for the dollar will strengthen thanks to the continuation of the rally in the AI sector. On the commodity side, the assessment is that the oil market will not experience abnormal fluctuations and the price range will be 55-65 dollars per barrel. Regarding gold, which broke records in 2025, the base forecast is for a moderate decline. They remain optimistic about copper prices And the aluminum because of the demand from the AI sector.

5Five risks to the global economy, despite everything: A larger-than-expected hit from the tariffs, which may include a price increase that will lead to inflationary pressures – which will complicate the Fed’s measures to lower interest rates; sharp deterioration in the American labor market; risks of a decrease in investments and valuations in the AI ​​sector; higher than expected damage to private consumption in China; and high levels of public debt in many countries and heavy deficits that will lead to uncertainty and weigh on the governments’ ability to ease the markets in crisis.

HSBC: Get ready for a massive wave of capital investment

In the forecast for the coming year, HSBC describes the global economy as a “busy construction site, especially in the US”. The reasons: intensive adoption of AI and cloud technologies require the rapid establishment of data centers. At the same time, more and more companies are responding to the White House’s request to invest in the US, in order to achieve its goal of greater strategic autonomy in supply chains, advanced manufacturing, technology and defense. Bottom line, the international investment group expects a strong capital investment cycle that the markets are underpricing.

1A surprising position regarding interest rate cuts: The bank fears that the US Fed will stop the cycle of interest rate cuts, contrary to market expectations. The assumption is based on the fact that the Fed will not lose its independence (despite the end of the term of Chairman Jerome Powell in May) and will realize that the economy does not need so many reductions. Although the general environment remains positive for risk assets, the assessment is that volatility in the markets is not behind us, amid speculation about the Fed’s actions and the impact of inflation on low-income households. Added to this will be trade tensions and uncertainties geopolitically, which will contribute to temporary volatility that requires careful and active portfolio management.

2The number one obsession of the markets: Technological innovation and its introduction into the global economy will likely remain the market’s number one obsession, according to the bank. “Therefore, it is not surprising that our preferred stock markets are among those with the highest scores in the Global Innovation Index. They include the US, mainland China, Singapore, Japan, South Korea and Hong Kong. Europe, unfortunately, lags behind.”

3Returns outside the tech giants: At HSBC, investors are urged to avoid concentration in the technology giants and to look for the “smart efforts” of AI technology in all sectors of the economy. The bank’s recommendation is to divert investments towards the infrastructure and public services sector to take advantage of the surge in energy demand from the AI ​​world, alongside looking for value opportunities in the finance and industry sectors.

4Gold and hedge funds will help deal with volatility: While the starting assumption is that the positive trend in the markets will continue, there may be periods of declines and volatility. The bank urges investors to diversify beyond the traditional sectors, which also includes alternative assets and geographic diversification. The recommended basket of tools includes gold, hedge funds, private credit, private investments and infrastructure.

5Big opportunities in Asia: HSBC recommends taking advantage of Asia’s unique diversification opportunities, which combine accelerated technological growth with stable sources of income. Optimism about the region rests on strong “tailwinds”: China’s focus on technological independence, booming investments in AI in the region, and reforms in corporate governance that increase returns for shareholders. In the equity channel, the bank holds an “overweight” position on the markets of China, Hong Kong, Japan, Singapore and South Korea. In the area of ​​bonds, HSBC recognizes special value in Chinese bonds denominated in foreign currency and Indian bonds in local currency, while focusing on high quality Asian credit.

S&P: India will grow at the fastest rate

The international rating company S&P predicts that global economic growth for 2026 and 2027 will be 3.2%. In the years 2026-2028, the main source will be emerging markets. In their estimation, we will also see a recovery in the Eurozone, but in the US and China there will be a slowdown in growth. In addition, they expect that the Fed will continue to reduce interest rates, and that the accelerated establishment of data centers for the AI ​​revolution will continue to drive the economy, but concerns about the field’s viability are growing.

1The emerging markets will lead: S&P predicts that emerging markets will contribute about two-thirds of global GDP growth in 2026. The most significant growth, 6.5%-7.0%, is expected in India, where stable domestic demand will soften the slowdown in exports as a result of tariffs. The lull in the trade war with the US is expected to support growth in China, which will return to 4.5%. The increase in spending on defense and infrastructure, especially in Germany, will contribute to the acceleration of European growth to 1.5% by 2028. The drop in oil prices stimulates the global economy, increases disposable income and encourages consumer spending.

2Interest rates in the US will drop twice: The company predicts that the Fed in the US will make two interest rate cuts of 25 basis points in the second half of 2026, when inflation will decrease. They estimate that the European Central Bank has completed the round of interest rate cuts “which reached 2%, its neutral level”, noting that in some developing countries there is still the possibility of continuing the reductions but “in Asia we are approaching the end of the monetary expansion path”, and write that “the financing conditions are relatively favorable general They reflect relatively low interest rates, narrow margins and record-breaking issue volumes.”

3The sectors at risk of a downgrade: The ongoing flexibility in global credit conditions is expected by S&P to continue in 2026, but they expect differences in the performance of the ratings between different sectors and geographic regions. Sectors with a high negative forecast balance, such as chemicals, automotive, healthcare, media and consumer products, have seen more negative rating actions and defaults in recent years. Across emerging markets, the chemicals, consumer staples, metals and mining sectors are most at risk for negative rating actions.

4The open question regarding AI: Rapid technological progress, especially in the field of AI, fundamentally changes business environments and regulatory frameworks. S&P claims that a key question, which is too early to answer, is whether the ongoing significant investment in AI will improve productivity and outputs sufficiently to produce the expected returns?

5The dangers from the trade war have not ended: The rating company estimates that tensions in world trade have subsided somewhat with the announcements of new international deals, but many of the new agreements are not detailed enough and may be fragile. The resulting uncertainty suppresses investment and consumption, and distorts competition.

The ongoing conflicts in Russia-Ukraine and the Middle East emphasize the fragility of security and political stability in an increasingly divided world. More generally, unexpected negative commercial or geopolitical developments, but also a waning enthusiasm for AI investments, could challenge the resilience of financial markets.