The Corner December 2025

Perspectives – December 23, 2025

As we wrap up 2025, we see a continuation of our high-conviction view: we are still in a global secular bull market, even as the coming year looks to be more of a reset than a runaway rally. After a 100% gain off the 2022 lows and a powerful earnings cycle through 2025, we expect valuations to consolidate and volatility to rise. Our outlook is for the S&P 500 to trend toward 7500 in 2026, consistent with the historical pattern of mid-term election years and the decennial cycle. Beneath the surface, we believe the long-term runway is intact, with the secular trend pointing to 10,000-13,000 for the S&P 500 by the end of the decade.

December has all but reinforced our view that the year ahead will be defined by three key market forces: a reset in Technology and Growth leadership, the acceleration of global equity markets within their own secular bull trend, and the ongoing impact of innovation-driven productivity gains. Technology and Tech-related industries – especially Semiconductors – remain the dominant engines fueling corporate profitability, but returns have been extraordinary and will likely consolidate before the next higher level. At the same time, non-U.S. equities have broken out to new secular highs, offering more attractive valuations and emerging opportunities for diversified portfolios.

We also expect crosscurrents from interest rates and currencies. Seasonal pressures may push yields somewhat higher in early 2026 before the broader downtrend resumes. Meanwhile the U.S. dollar may strengthen, adding volatility to equity markets and dragging down multinational earnings. Still, the macro backdrop remains positive: money supply growth is improving, corporate balance sheets are strong, and productivity gains across AI, Robotics, and data-center infrastructure are beginning to build the foundation for another phase in economic expansion.

In this month’s report, we outline why 2026 is shaping up to be a year of consolidation with an upward bias, what a reset in leadership means for portfolios, and why staying invested – while gradually increasing international exposure – remains the most prudent strategy for the year ahead, in our view.