Markets weigh impact of AI spending and Fed cuts on 2026 outlook

The US stock market is closing the books on a third straight year of double-digit percentage gains. A fourth stellar year in 2026 may be a tall order, requiring strong earnings, a dovish Federal Reserve and strong artificial intelligence spending.

The bull market for US stocks that started in October 2022 has been propelled by AI optimism, interest rate cuts and the economy continuing to grow despite fears of a recession. The gains were achieved during a rollercoaster year which saw...