US Stock Market Outlook: Q1 2026
Higher stock valuations and key risks are expected to shape the market in 2026.
With significant earnings growth of mega-cap stocks, our analysts raised the fair values of these stocks, which have pushed our valuation of the US equity market to be just below our composite of fair value estimates. What this means, though, is that the market discount is concentrated in these mega-cap stocks that center themselves in AI—making it harder to find undervalued opportunities across the board. Moreover, our stock market forecast for the year expects additional volatility, highlighting the importance of investors keeping a pulse on the markets as they head into 2026.
The Q1 2026 edition of Morningstar’s US Stock Market Outlook examines our equity research coverage based on the equity style box, economic moats, sector valuations, and more. The report outlines key risks for the year ahead to help investors identify short- and long-term portfolio considerations.
Access the full report to set your investment strategy up for success in 2026, regardless of which way the market could swing.
