2026: How global markets will be reconfigured under the new AI reality

In a scenario where artificial intelligence accelerates its expansion, monetary policy diverges between regions, and the global market faces unprecedented structural polarization, JPMorgan warns of a “new normal” where opportunities and risks coexist.

The global market in 2026: paradoxical resilience and latent dangers

JPMorgan analysts do not predict a simply bullish or bearish 2026, but rather a year characterized by contradictions. While economic growth remains resilient thanks to anticipated fiscal stimuli and solid balances of companies and households, weakened business confidence, rising unemployment, and persistent inflation keep the door open to a recessionary scenario. In fact, JPMorgan estimates a 35% probability that the United States and the global economy will experience a recession in 2026.

Dubravko Lakos-Bujas, JPMorgan’s Chief Global Markets Strategist, summarizes the dilemma: “Multidimensional differentiation is at the core of our analysis. The stock market is segmented between AI winners and technological losers. The US economy seeks balance between strong capital expenditure and weak labor demand. Even household consumption shows signs of increasing polarization.”

This is the reality facing investors: although corporate fundamentals remain robust and liquidity abundant, market sentiment will be highly volatile in a macroeconomic uncertainty context. The AI supercycle could extend into 2026, but not without turbulence.

What to expect from global stock markets?

United States: extreme concentration driven by AI

JPMorgan forecasts that the US stock market will continue the trajectory of 2025, with increasing concentration. The AI-driven supercycle will generate earnings growth of 13%-15% annually over the next two years, well above the historical average. However, this means the “winner takes all” phenomenon will reach new highs, leaving non-tech sectors behind.

Volatility will be higher even when fundamentals remain solid because the market will be dominated by the AI narrative versus the reality of weakening labor.

Eurozone: credit recovery with fiscal tailwinds

The Eurozone could surprise to the upside in 2026. Improved credit conditions and anticipated fiscal stimuli will boost economic activity. Earnings growth of over 13% is expected, fueled by higher operational leverage, reduced tariff pressures, improved comparables, and a more relaxed financing environment.

Japan: the Takaichi effect

Under Prime Minister Sanae Takaichi’s leadership, “Sanaenomics” promises to revitalize the Japanese stock market. The focus on releasing corporate cash, capital investment, and wage growth could generate new equity return dynamics. Additionally, a rebound in middle-class consumption and increased strategic investment would provide further support.

Emerging markets: demand returns

In a context of falling local rates, accelerating earnings growth, and attractive valuations, emerging markets have solid bases for performance. China could show recovery in the private sector, South Korea will continue benefiting from governance reforms and AI development, while Latin America might experience a rebound driven by expansionary monetary policies and political changes.

JPMorgan maintains a positive outlook for both developed and emerging markets to achieve double-digit gains in 2026.

The global economy: on the edge of a knife

Bruce Kasman, JPMorgan’s Chief Economist, identifies labor market weakness as the main drag. Companies adopt a cautious stance amid trade conflicts and weak demand outside the tech sector. This labor demand shortfall is beginning to erode purchasing power, especially in the US.

However, JPMorgan is confident that a healthy corporate sector, loose financial conditions, and fiscal stimuli will absorb this impact. If this occurs, employment growth and confidence would gradually recover in the first half of 2026, reactivating demand and GDP growth.

Inflation will remain a dominant issue. After the gradual dissipation of pandemic and geopolitical shocks, it persists around 3% with no clear signs of decline. Price pressures related to commodity prices affected by trade conflicts could be temporary, but are expected to persist into the first half of 2026.

Interest rates: unprecedented divergence

JPMorgan projects that most developed markets will reach or surpass their growth potential in 2026, while inflation recedes. This will deepen monetary divergence: the Federal Reserve will cut rates by an additional 50 basis points, but the Bank of Japan could raise them by 50 basis points. Other central banks will remain cautious or end easing cycles.

By Q4 2026, JPMorgan expects 10-year bond yields to reach:

• US Treasury: 4.35%
• German bond: 2.75%
• UK bond: 4.75%

Jay Barry, Global Rates Strategist, warns: “We expect Treasury yields to fluctuate within a range over the coming months, rebounding modestly after the Fed’s pause in spring. Outside the US, German and UK bonds could weaken passively by mid-year as US yields rise.”

In Japan, JPMorgan remains bearish on bonds, expecting a general flattening trend.

Currency markets: dollar under pressure, but contained

JPMorgan maintains a bearish view on the dollar for 2026, though less pronounced than in 2025. Meera Chandan, Global FX Strategy Co-Director, explains: “The Fed’s concern about labor weakness and the favorable environment for high-yield currencies will pressure the dollar, but solid US growth and persistent inflation will limit its depreciation.”

The euro could appreciate modestly, benefiting from the Eurozone’s growth prospects and German fiscal expansion. However, unless US data weaken significantly, the rise will be smaller than in 2025.

The British pound offers tactical “buy on dips” opportunities thanks to resilient domestic growth. But JPMorgan warns that structural drag persists, with likely greater strength in the first half of the year, while fiscal concerns could weigh again in the second half.

The yen will continue to weaken slightly. Junya Tanase, JPMorgan Japan FX Strategist, warns: “As G10 easing cycles come to an end, it will become harder to curb yen depreciation. If the 2026 budget confirms an expansionary fiscal stance, fiscal sustainability concerns will increase downward pressure.”

Commodities: oil seeking balance, energy in transition

Oil: theoretical surplus, practical rebalancing

JPMorgan projects global oil demand will increase by 900,000 barrels/day in 2026 and 1.2 million in 2027. However, supply is expected to grow three times as much in 2026, creating a notable theoretical surplus. Natasha Kaneva, Global Commodities Strategist, explains how this will be resolved: “We expect rebalancing through demand (driven by falling prices) and a combination of voluntary and involuntary production cuts.”

Consequently, JPMorgan maintains its Brent price forecast of $58 in 2026, aware that stabilizing at this level will require considerable effort.

Natural gas: sustained decline due to new supply

The increase in liquefied natural gas supply will support falling global prices. With new projects coming online, JPMorgan expects the average TTF (European benchmark) price to be €28.75/MWh in 2026 and €24.75/MWh in 2027, 3 to 4 euros/MWh below current forward prices.

Precious metals: gold at all-time highs

JPMorgan remains bullish on gold, benefiting from central bank purchases and strong investment demand. It is expected to reach $5,000/ounce in Q4 2026, with an annual average of $4,753/ounce. Silver could rise to $58/ounce in Q4, averaging $56, while platinum would maintain relative strength until supply rebalancing progresses.

Agricultural products: increasing volatility due to inventory stress

Implied volatility in agricultural products has recently increased. Although there are no imminent signs of shortages (except for livestock and cacao), inventory-to-consumption projections for 2026/27 and 2027/28 are approaching multi-year lows. The reduced inventory base, driven by low margins for producers, makes prices more sensitive to supply disruptions.

The final outlook: prepare for uncertainty

Fabio Bassi, JPMorgan’s Multi-Asset Strategist, emphasizes the overall tone: “The market environment remains fragile. Investors must move forward in a context where risk and resilience coexist.”

For 2026, this means that while the AI supercycle could extend and global stock markets achieve double-digit gains, volatility will persist, differentiation will be extreme, and real recession risks will remain. Winners and losers in this global market will be clearly defined, but the path to them will be anything but smooth.