Commentary

Second Quarter 2026 Quarterly Business Cycle Update

Geopolitical risk rises, but global economy remains in expansion

By: Fidelity Asset Allocation Research Team

Updated: 4/14/2026

Key Takeaways

Amid heightened geopolitical risk, positive earnings momentum, fiscal support, and wealth-powered high-end consumption continue to support the fundamental U.S. economic backdrop.
Although lower-income consumers face risks from rising energy costs, the consumer in the aggregate is less exposed to energy prices versus prior decades of oil supply shocks.
The combination of tariffs, rising energy costs, and stable U.S. growth suggests inflation could stay elevated and represents an underappreciated risk.

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Quarterly Business Cycle Update (Q2 2026)

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