Which factor do you expect to dominate equity returns in Q1 2026? 👇
US stock futures are starting the last full trading week of 2025 on a firmer note as the tech selloff cools off, and the overall tone from strategists is still pretty bullish for 2026. Citi, for example, is talking about robust earnings growth and a potential double-digit move higher for the $SPX500 next year and that matters, because it keeps “risk-on” narratives alive even after a choppy year. 📈
What I find more interesting is the rotation theme. We’re hearing more and more that money is gradually moving away from the crowded “Magnificent Seven-only” trade and into less popular parts of the market. Health care, industrials, and energy keep showing up in 2026 shopping lists, and that lines up with what you’d expect when mega-cap valuations look stretched and investors want broader participation instead of one narrow leadership group.
At the same time, the macro driver that can flip sentiment fast is still rates. This week’s key data (jobs + US CPI) will heavily influence expectations around how much easing is left after recent cuts and that goes straight into the 10-year yield (around ~4.2% now). If the labor market weakens, yields can drift lower, if inflation stays sticky, the market can reprice quickly.
And don’t ignore commodities: $GOLD near record highs and $COPPER.FUT bouncing back tells me hedging demand is still present, and investors are not fully “all-clear” on the inflation/uncertainty front.
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