Commentary

Fourth 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 Q4 2026 quarterly market update.

Key Takeaways

Markets: Markets posted modest gains in Q3 despite higher oil prices and a Fed rate hike, as strong corporate earnings, continued AI investment, and ongoing economic expansion helped counter geopolitical and interest-rate concerns.
Economy: The global economy remained in a resilient mid-cycle expansion, supported by strengthening manufacturing activity, improving US labor markets, and broad-based earnings growth despite persistent inflation.
Investments: Market performance drivers shifted during the quarter, with energy stocks and commodities surging on higher oil prices while small caps and most fixed-income sectors struggled under the pressure of rising interest rates and bond yields.
Valuations: Bond valuations became more attractive as yields rose to historically elevated levels, while strong earnings expectations and low recession risk continued to support risk assets.

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Fourth Quarter 2026 Quarterly Market Update

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