The story of 2026 has been “better than expected.” Despite geopolitical tensions, rising energy prices, new tariffs, and higher interest rates, economic growth and corporate earnings have remained resilient, supporting positive equity returns and reinforcing the value of a diversified, long-term investment approach.
At a glance:
- Global equities1 gained +1.6% in Q3, bringing year-to-date returns to +13.0%, with international equities continuing to outperform U.S. equities this year.
- Corporate earnings continued to exceed expectations, with third-quarter S&P 500 earnings growth now expected to approach +30% year-over-year.
- AI investment remains an important driver of growth, supporting earnings across the technology, infrastructure, industrial, and utility sectors as companies move from spending on AI to realizing measurable benefits.
- Higher interest rates weighed on bonds, but yields now offer a more attractive starting point and improved long-term income potential for investors.
- Many diversified investors who stayed the course were rewarded as equity portfolios are up meaningfully, international diversification has added to returns, and commodity exposure has contributed strong gains and provided inflation protection.
1MSCI All Country World Index.
