Kevin Schultz, CFA

The financial narrative is evolving from asking how big the opportunity is to asking how sustainable the returns are.

Taken overall, the first quarter of 2026 underscored a transition away from broad, liquidity driven gains toward a more selective and risk aware environment.

While several supportive economic and market factors are in place as we enter 2026, the path ahead is unlikely to be smooth.

The markets weigh Fed policy recalibration, labor market ambiguity, resilient risk assets … and the impact of artificial intelligence.

Heading into the second half of the year, the U.S. economy is projected to grow at a modest pace, although recession risks remain elevated and the labor market remains a focal point.

A look ahead at opportunities and headwinds.

Despite inflation and monetary policy headwinds, 2024 topped consensus expectations. But as we enter 2025, several questions remain.

As we start on the final months of the year, we are on the cusp of resolving the most significant uncertainty that has affected the market in 2024.

As we enter the second half of the year, it appears the fundamental drivers of the economy have improved. But some concerns remain.