Third Quarter 2026 Quarterly Market Update

Fidelity's Asset Allocation Research Team (AART) examines themes in global financial markets and presents its investment outlook in this Q3 2026 quarterly market update.

Key Takeaways

• Markets: Markets rebounded and broadened in the second quarter, with gains extending beyond large cap stocks and into small caps, emerging markets, and fixed income.
• Economy: The global economy remained in a mid-cycle expansion, supported by resilient industrial activity, improving labor markets, and broadening corporate earnings growth.
• Investments: Strong AI-driven capital spending and positive earnings momentum supported growth stocks, while gold and other precious metals declined as the Fed adopted a more hawkish tone.

• Valuations: Elevated valuations for AI-linked stocks leave markets open to volatility, while fixed income yields suggest bond valuations are close to long-term averages and may provide solid income as part of a diverse portfolio.

   

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