The New Yr celebrations proceed within the investing world.
The S&P 500 (^GSPC) is close to a file. The Nasdaq Composite (^IXIC) is close to a file. The Dow Jones Industrial Common (^DJI) is knocking on the door of breaking by means of 50,000 for the primary time.
“The rally is broadening out — and that’s precisely what you need to see at this stage of the cycle,” SlateStone Wealth chief market strategist and Yahoo Finance contributor Kenny Polcari stated. “Extra shares (assume the opposite S&P 500 names) are taking part. Capital is discovering alternatives elsewhere. For me, that means a extra sturdy bull market.”
Learn extra: What’s forward for shares and gold in 2026? What consultants are watching.
The bullish exercise prompted me to submit “The place are you having your Dow 50k social gathering?” on LinkedIn final evening. That finally led to a good friend asking if the Dow rally was solely due to huge synthetic intelligence investments within the US and the potential productivity-driven income.
I considered it for a second and thought, nicely no, there’s extra occurring than simply AI fascinating the minds of traders.
So right here is the only set of the reason why shares are rocking.
Fiscal stimulus stands to spice up shopper spending within the first half of the yr. Coverage modifications below the One Massive Stunning Invoice Act of 2025 (OBBBA) will result in larger tax refunds this spring.
“The upcoming tax refund season will profit considerably from the OBBBA,” the Keybanc shopper crew wrote in a brand new word. “Extra particularly, the OBBBA retroactively adjusted tax charges for 2025 (for a better customary deduction, expanded SALT deductions, and no tax on suggestions/time beyond regulation), with many People possible not updating their withholdings.”
“It’s estimated this might profit refunds by $50 billion to $100 billion, with Treasury Secretary Scott Bessent saying in December he estimated it may even be a $100 billion to $150 billion profit. On the $50 billion degree, if customers have been to spend their complete refund within the first half, we estimate it may carry retail gross sales by 2% to 4%, after netting out SNAP headwinds.”
Keybanc stated Walmart (WMT), Goal (TGT), Greenback Normal (DG), Greenback Tree (DLTR), and 5 Beneath (FIVE) ought to be prime beneficiaries.
We entered the yr with decrease rates of interest versus 2025, which may assist jump-start the stagnant US housing market this spring. The federal funds goal price was lowered by about 0.75% over the course of 2025. Mortgage charges (30-year fastened) have declined to six.2% vs. 6.9% final yr.
