US Stock Market Outlook: Q1 2026
We expect higher stock valuations and key risks to shape the market in 2026.
Morningstar analysts raised the fair values on several mega-cap stocks based on significant earnings growth, pushing our US equity market valuations to just below our composite of fair value estimates. This means the market discount is concentrated in AI mega-cap stocks—making it harder to find undervalued opportunities across the board. Our 2026 stock market forecast also expects more 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 how the market swings.
