Highlights From LPL Research’s Midyear Outlook 2026 | LPL Market Signals
About this episode
LPL Research discusses key themes from their Midyear Outlook 2026, focusing on stocks, bonds, and economic factors for the second half of the year.
In this special edition of market signals, LPL strategists share highlights from LPL Research’s Midyear Outlook 2026 publication released on July 7. They share key themes for stocks, bonds, and the economy that LPL Research believes will be determining factors of second half returns. For stocks, progress toward monetization of artificial intelligence (AI) will be a key factor in the second half. LPL Research expects gains for stocks on the back of strong earnings growth and, if the macro backdrop improves, a slight increase in valuations. AI disappointments, geopolitics, and midterm elections are among the primary risks. For bonds, LPL Research expects sticky inflation and resilient growth to keep the Federal Reserve on extended pause, leaving Treasury yields range-bound, with the 10-year likely finishing the year between 4.00% and 4.50% absent disinflation or clear economic weakening. Tight credit spreads likely to persist, though AI-driven borrowing by hyperscalers may pressure spreads modestly higher. Returns may be income-driven as Treasury yields stay rangebound and credit spreads remain tight. Finally, U.S. economic growth should moderate but remain positive in the second…
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