With 2025 in the rear-view mirror, global capital markets open a new chapter in 2026 with a mix of possibilities and uncertainties. Here, several FactSet leaders share their views on what to watch across S&P 500 earnings, the U.S. ETF market, enterprise AI agents, private assets, power and utilities, oil and gas, global policy, wealth management, and international equities.
John Butters, Vice President and Senior Earnings Analyst
Analysts expect the S&P 500 to report double-digit earnings growth for the third straight year in CY 2026. The estimated (year-over-year) earnings growth rate for CY 2026 is 15.0%, which is above the trailing 10-year average (annual) earnings growth rate of 8.6% (2015 – 2024). If 15.0% is the final number for the year, it will mark the sixth consecutive year of earnings growth and third consecutive year of double-digit growth.
It is interesting to note that only two of the top five contributors to earnings growth for CY 2026 are “Magnificent 7” companies: NVIDIA and Meta Platforms. Overall, analysts expect the “Magnificent 7” companies will report earnings growth of 22.7% for CY 2026, which is slightly above the estimated earnings growth rate of 22.3% for CY 2025. On the other hand, analysts predict the other 493 companies will report earnings growth of 12.5% for CY 2026, which is above the estimated earnings growth rate of 9.4% for CY 2025.
All eleven sectors are predicted to report year-over-year earnings growth in CY 2026. Five of these sectors are projected to report double-digit growth: Information Technology, Materials, Industrials, Communication Services, and Consumer Discretionary.
In terms of revenues, the estimated (year-over-year) revenue growth rate for CY 2026 is 7.2%, which is above the trailing 10-year average (annual) revenue growth rate of 5.3% (2015 – 2024). Ten of the eleven sectors are projected to report year-over-year growth in revenues, led by the Information Technology and Communication Services sectors. On the other hand, the Energy sector is the only sector predicted to report a year-over-year decline in revenues for CY 2026.
The estimated net profit margin for the S&P 500 for 2026 is 13.9%, which is above the 10-year average (annual) net profit margin of 11.0%. If 13.9% is the actual net profit margin for the year, it will mark the highest (annual) net profit margin reported by the index since FactSet began tracking this metric in 2008.
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Elisabeth Kashner, VP Director of Global Fund Analytics, and Lois Gregson, Senior ETF Analyst
Investors continue to prioritize cheap, maximally diversified portfolios. ETF issuer Vanguard, often the low-cost leader, will continue to benefit as it overtakes Blackrock to become the top U.S. ETF issuer.
Actively managed ETFs will continue to grow in number and market share. In 2025 the SEC approved dual share class offerings, clearing the way for fund issuers to offer investors a choice of investment wrapper. Expect a trickle, and maybe then a wave of new actively managed ETF launches in 2026, once asset managers and their service providers resolve outstanding operational issues.
The oldest ETF structure may not stand for much longer, following Invesco's success in transitioning QQQ from a unit investment trust to the more popular open-ended fund. Investors clearly prefer State Street and Invesco’s SPY and QQQ cheaper “mini” clones, SPYM and QQQM, over the originals.
Half of all currency ETFs available today were launched in 2025—and every single one of them focuses on crypto. Investors have responded by pouring $6 billion into these 2025 vintage funds. Helping to fuel this momentum is the OCC’s letter 1188, which allows banks to engage in crypto transactions, potentially increasing crypto liquidity. All signs suggest this growing trend is only beginning.
The explosive growth of structured outcome ETFs results from the real-world challenges that financial advisors and clients face: reducing risk, pursuing stable returns, generating income, or boosting growth. These options-based products often provide a more efficient solution compared to traditional insurance, liquid alternatives, or separate accounts. The demand for options strategy ETFs continues to increase; investor education must keep up.
Should bond market pricing become disrupted, ETF investors in fast-growing, liquidity-constrained bond funds with exposure to private credit or CLOs could find themselves facing wide spreads.
Interest in prediction markets and higher-risk investing has translated into surging demand for leveraged products. While leverage can amplify returns, it’s a double-edged sword; when markets turn south, losses can spiral quickly for those who are overexposed. Investors should tread carefully and be aware of the risks involved.
As strategies continue to migrate into the ETF wrapper and the ETF universe continues to expand in size, count, and variety, 2026 is shaping up to bring tons of choice and challenge to investors of all types.
Ryan Roser, Senior Director, Head of AI and ML
Generative AI and agentic systems are becoming mission-critical infrastructure for financial services and data-intensive enterprises. AI and agentic tools have demonstrated tremendous capacity for productivity gains. Expect work in 2026 to mature these systems and improve accuracy, consistency, and ease of use, all of which build confidence in AI acceleration.
Early adopters will face scalability challenges as they seek to monitor their agents, measure success, and optimize use of intelligence from LLMs. These challenges will drive innovation around agent orchestration, evaluation, and workflows.
Increased experience collaborating with agents will also lead to new types of AI-native thinking that leverages the scale and non-determinism of AI. Expect an embrace of stochastic mindsets and evolutionary or Monte Carlo approaches to agentic problem-solving. Rapid experimentation and agility here will be enabled by a mature orchestration, evaluation, and execution stack for agents.
There’s a paradox at the heart of AI acceleration: As the technology lifts off within organizations, it becomes increasingly invisible to those not directly involved. Business leaders removed from day-to-day implementation may struggle to recognize the promised gains, seeing only mounting infrastructure costs and headcount shifts.
From the outside, AI investments can appear as a resource-consuming black hole, or worse, a speculative bubble divorced from fundamental value creation. This perception gap presents a critical challenge for AI proponents and technology leaders. Demonstrating tangible ROI, articulating clear use cases, and broadening adoption beyond early enthusiasts will be critical in 2026.
Maintaining trust will be essential to the AI transition. The tradeoff between personalization and privacy will come to the forefront this year as AI users see benefits from deeply personalized agents and digital twins while harboring concerns around privacy. This will lead to technical innovations both in the agent stack and at the LLM level to address privacy tradeoffs.
Meanwhile, regulatory frameworks will continue to take shape, from AI disclosure requirements to updated data privacy laws, providing the structural clarity that accelerates enterprise adoption. Financial institutions that perceive regulatory compliance as a competitive advantage rather than an operational burden will lead this transition, maturing corporate policies around responsible AI, security, and safety.
Jennifer Hanscomb, Content Manager of Entities and Transactions, and Richard Thomson, Principal Product Manager of DW Private Capital
As private capital markets move forward this year, one of the most consequential developments to watch is how expanded access to private investments—including through 401(k) plans, retail channels, and other investment vehicles—may begin to take shape as regulatory guidance and frameworks continue to evolve. While any change is likely to be gradual, the prospect of broader participation in private markets raises fundamental questions around liquidity, disclosure, valuation, and fiduciary oversight. Understanding how private assets are structured, monitored, and communicated alongside traditional investments will be critical for investors and advisors.
These developments are unfolding alongside continued deployment of private capital into technology-enabled assets, particularly AI-related infrastructure, data centers, and the real assets that support them. Private portfolios are growing larger and more complex, often spanning multiple regions. As a result, investors are placing greater weight on valuation discipline, transparency, and looking beyond headline NAVs to assess underlying exposures and risks. This includes how liquidity is managed over longer holding periods through secondary markets and other liquidity solutions.
At the same time, private market activity continues to vary meaningfully by region, reflecting differences in economic conditions, regulation, and market maturity. This reinforces the need for consistent, comparable data across geographies.
Against this backdrop, the leading firms will translate these themes into operational excellence.
For 2026, the main goal is clear: increase access while preserving oversight. That involves codifying valuation frameworks, rigorously assessing NAVs, stress-testing liquidity across different cycles, standardizing cross-border reporting, and using AI to proactively identify exposures faster than they form. The convergence of private assets and public-market expectations isn’t just a risk to manage—it’s an opportunity to set a higher standard and deliver improved outcomes.
Matthew Hoza, Director, Power and Utilities
The development of data centers will continue to cast a long shadow over the power and utilities industry in 2026.
In 2025, expectations for load growth accelerated, but actual new demand in U.S. markets remained limited. This will change in 2026 as data centers under development come online, challenging both wholesale markets and utilities around the country.
In wholesale markets, speculation around the impacts of data centers will give way to new realities. Reliability concerns will move to the forefront as additions of thermal capacity lag, hampered by supply-chain bottlenecks and the inherent delays associated with building new natural gas-fired plants. Although solar and battery storage capacity additions are expected to be robust, thanks in part to project safe harboring in the wake of the One Big Beautiful Bill Act, these resources will struggle to keep pace with new demand, especially during extreme weather events.
Regarding utilities and rising prices in the broader economy, public sentiment is strong and suggests there could be election implications with public utilities commissions in the future. Utilities across the U.S. will need to reconcile their FERC-mandated duty to provide non-discriminatory access to their grids with the growing risk of higher rates for consumers during an affordability crunch.
Utilities will likely continue experimenting with various rate structures in an attempt to shield existing customers from the costs inherent in serving new data center customers. Nevertheless, rate base growth will be strong as utilities ramp up spending on generation, transmission, and distribution infrastructure to maintain reliability amid the surge of new large-scale connections.
Jesse Mercer, Director, Deep Sector Oil & Gas
We expect the global oil market to remain well supplied in 2026, supported by elevated OPEC+ production and robust growth from non-OPEC producers, particularly the U.S., Canada, Guyana, and Brazil. Downward pressure on crude prices, evident through the final months of 2025, is expected to continue into 2026. Recent events in Venezuela create further uncertainty, but Trump Administration statements advocating for the revival of Venezuela’s oil industry have raised prospects for increased Venezuelan supply. Record-high volumes of crude on the water, largely consisting of sanctioned Russian barrels, also pose a downside risk to prices if U.S. sanctions on Russian oil become a bargaining chip in negotiations on Ukraine. Excluding this key risk, WTI is forecast to average just under $58/bbl in 2026, with Brent holding a $4/bbl premium.
For natural gas, 2026 will see significant demand growth in the United States from new LNG capacity and rising power burn, supported in large part by declines in coal and increasing load from data center demand. Henry Hub is expected to average $3.72/MMBtu, with LNG feedgas topping 21 Bcf/d by year-end as Golden Pass, Plaquemines, and Corpus Christi Stage III ramp up. Meanwhile, new Permian pipeline projects (GCX expansion, Blackcomb, and Hugh Brinson) will add over 4 Bcf/d of takeaway, tightening Waha basis. In the Haynesville, the Louisiana Energy Gateway and New Generation Gas Gathering pipelines that came online in 2025 will be critical to meet Gulf Coast LNG demand and keep basis firm.
In 2026, upstream activity will balance capital discipline, inventory quality, and breakeven economics. U.S. Lower 48 dry gas production is forecast to average 111.6 Bcf/d, with growth focused on the Permian, Haynesville, and Northeast. While core gas plays remain economical below $3/MMBtu, depletion of low-cost inventory will gradually raise breakeven thresholds in the coming years. Meanwhile, U.S. oil production is forecast to grow about 0.4 MMb/d year-on-year. Oil-directed E&P activity will be most resilient in the Permian, where sub-$50 breakevens persist, while higher-cost areas like the Bakken and Eagle Ford will see flat production growth.
Michele Lieber, Global Head of Government Affairs and Regulatory Strategy
From a public policy perspective, there is remarkable momentum. In just the first two weeks of the year, the pace and breadth of developments signal the months ahead will be highly consequential. Three forces will shape global policy in 2026: geopolitics, technological advancement, and legislative enactment. Within this landscape, AI governance, cybersecurity, and global privacy regimes will remain central areas of focus.
In the United States, House Financial Services Committee leadership continues to prioritize codifying key elements of the policy framework into statute rather than relying on regulatory rulemaking. This approach reflects a deliberate effort to reduce policy volatility and avoid the pendulum swings that have characterized transitions between administrations.
Digital asset policy has notably evolved. In 2025, the debate shifted from whether to regulate to how regulation should be implemented. With a federal stablecoin framework now in place and being operationalized by regulators, legislative attention has turned to broader market structure issues—custody, tokenization, supervision, and taxation. Policymakers are closely examining statutory definitions related to tokenized assets, payment stablecoins, custody models, and trading venues. These developments will significantly reshape data collection, disclosure, reporting obligations, and supervisory expectations across the financial ecosystem.
Financial data rights and data-sharing frameworks will remain a flashpoint in 2026. Open banking and alternative assets for 401(k) plan implementation timelines—coupled with potential congressional and regulatory intervention—present material implications for banks, fintech firms, and data aggregators alike.
AI adoption will continue to accelerate even as legislators and regulators grapple with guardrails, regulatory sandboxes, model governance, and supervisory transparency. These debates will unfold across multiple jurisdictions and forums globally. At the same time, renewed scrutiny of proxy advisors and shareholder rights is gaining momentum.
Sustainability expectations are also evolving. Globally, the focus is shifting from disclosure-heavy reporting toward sustainability as an operating discipline. Leading companies are moving beyond framework-by-framework compliance and embedding sustainability into risk management, governance structures, data controls, and capital allocation decisions. The emphasis is increasingly on decision-useful information, assurance readiness, and execution rather than volume of disclosure.
Despite regulatory noise, momentum in U.S. capital markets remains strong. While timelines continue to shift—illustrated by California’s delays to SB 261 and SB 253, evolving New York initiatives, and postponed climate law implementation—investor, customer, and employee expectations remain elevated. This sustains pressure for robust climate risk management, emissions transparency, and governance practices.
In the European Union, the narrowing and phased implementation of CSRD reinforces a “do fewer things well” approach, prioritizing materiality, data quality, and auditability over breadth. Companies must remain agile, closely monitor regulatory developments, and maintain a constant state of regulatory readiness.
Ultimately, 2026 is an execution and build year. Legislative efforts are expected to advance further, strengthening statutory frameworks, minimizing regulatory arbitrage, and reducing the risk of regulation by enforcement.
Greg King, Senior Director, Wealth Management
Last year, I suggested that 2025 would be the year of “practical AI”. I was wrong. While the industry picked up a few wins with meeting notetakers and solid summarization tools, it spent the majority of 2025 still searching for successful use cases. That said, there was and is no shortage of appetite to go faster. So, absent a working crystal ball this year, here is what we’re seeing for the next 12 months.
In 2026, wealth management will have officially parted with the AI and digital sceptics. That debate will feel settled. The real differentiation will lie in how effectively firms connect third-party technology—particularly AI—to their proprietary data to drive advisor efficiency, client engagement, and revenue growth. The firms that lead will treat AI not as a standalone capability, but as connective tissue across advisor workflows, client interactions, and distribution strategy.
Following the AI delivery of insights in 2025, the expectation in 2026 shifts to execution at scale. Wealth management firms will increasingly integrate best-of-breed AI tools directly into their internal ecosystems: CRM platforms, research libraries, portfolio data, and client communication systems. The objective is not more analytics, but fewer steps between insight and action.
This shows up in practical, revenue-driving ways, like faster proposal creation, automated meeting prep, proactive outreach triggered by portfolio activity, market events, or client behavior, and timely communications that feel personal. The result is not just efficiency, but a material increase in advisor selling activity—more proposals delivered, more conversations initiated, and more opportunities identified.
As AI capabilities mature, firms will quickly learn that the differentiator is not the model—it’s the data. Now, competitive advantage accrues to firms that can draw insight from the connection between internal & third-party data and approved third-party AI tools. When internal data is activated in this way, client engagement becomes more relevant and more consistent. Wallet share grows not through product push, but through timely, contextual advice delivered at moments that matter.
In addition, a collision with wealth tech is coming. As traditional wealth managers move down market, digital-first platforms like Robinhood, Revolut, and Webull continue moving in the opposite direction—introducing advisory features, premium services, and more sophisticated offerings. As these trajectories converge, the debate over technology vs. humans will take center stage, bringing to the fore questions of trust, quality, context of advice, and the ability to blend digital convenience with human judgment. Firms that successfully combine AI-powered scale with advisor-led interpretation will occupy a powerful middle ground and will offer more depth than digital-only platforms and more accessibility than legacy private banking models.
Also this year, AI will no longer be a headline. Execution will be the story. The leading wealth management firms will integrate AI tools into core advisor workflows, activate internal data to consistently drive proactive engagement, and use technology to expand distribution without eroding trust or experience.
In a market shaped by fee pressure, rising competition, and shifting client expectations, the winners will not be the firms with the most tools—but the ones that figure out what their clients want from them and deliver it.
Pat Reilly, CFA, SVP, Senior Director of Mid Office Americas
Three drivers emerge as I think about what the new year may bring. The plot lines will surely twist and turn, but the trifecta of the Federal Reserve, U.S. consumer health, and the continued attractiveness of non-U.S. equity valuations will dominate investor mindshare and news headlines.
The drama of 2026 may include a new Fed Chair. While the unanimous reappointments of the regional Federal Reserve Bank presidents (minus one retirement) has de-risked stability concerns, the dot plot and potential attempts to politicize monetary policy could sow additional confusion around the Fed’s dual mandate of price stability and maximum employment. Current expectations call for one more cut leading into the summer. Where we end up could prove to be an adventure.
We begin 2026 with U.S. consumers on edge. Given they are responsible for nearly 70% of U.S. economic activity, understanding their sentiment about the economy and jobs market is critical to positioning for portfolio outperformance. Consumer confidence has long been a valued datapoint, as has employment data such as the JOLTS survey (Job Openings and Labor Turnover Survey) from the U.S. Bureau of Labor Statistics. If you layer on more concrete measurables such as the level of consumer credit and auto loan delinquencies, it can be hard to come away with an overly rosy profile of the consumer. Will we see tariff dividend checks, additional targeted tax policy, or other ways to boost consumption across the income curve? Only time will tell.
In 2025, international equities outperformed relative to U.S. mega caps in the S&P 500. In 2026, the valuation discount of many of these international markets could persist relative to the U.S., leading to the question of whether international equity outperformance will continue. While there are fundamental cracks in high-flying markets in Japan and China, continued structural tailwinds remain in the developed markets of Europe while demographic strengths persist in India and East Africa markets.
This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.
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The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.
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