Outlook 2026: here are the possible scenarios for global markets. What should we expect

An analysis for the new year of macroeconomic prospects, monetary policy, currencies, commodities, stock indices and cryptocurrencies, plus a selection of key global stocks.

By David Pascucci - XTB

In the final stretch of 2025, markets still appear to be heavily influenced by geopolitical uncertainty, a monetary policy in transition and accelerating investment in AI technologies, with 2026 described as a year of “assessment” for equity valuations and macro scenarios.

On the US front, the Federal Reserve is engaged in a gradual monetary easing after bringing inflation back below 3%, but it is forced to move cautiously because of the uncertainty generated by President Donald Trump’s trade policy. US inflation is certainly slowing, but it has not yet been “won”, with the possibility of a soft landing in 2026 supported by a less tight labour market, productivity gains linked to the use of AI and possible revisions or suspensions of tariffs by the Supreme Court.

In 2026, the European economy enters a phase of cautious optimism, with moderate growth, but still held back by weak domestic demand, delays in investment in R&D and heavy dependence on bank lending. The role of EU programmes to close the innovation gap and the weight of political and fiscal factors as the main downside risks to growth and investor confidence are worth highlighting. In terms of currencies and interest rates, the EURUSD appreciation in 2025 was driven by the weakness of the dollar and by the perception of the European currency as a partial safe-haven currency, with prospects of further support if a sharper divergence emerges between a relatively stable ECB and a more expansionary Fed. Among the risks, prolonged stagnation in the euro area, further ECB cuts below 2% and a weakening of confidence in European debt are highlighted, all of which could compress relative yields and the strength of the euro.

In this scenario, gold has been a strongly rising asset in 2025, with record price gains, a growing share in central bank reserves and a particularly important role for China, in a context of de-dollarization and the search for safe-haven assets. For oil, the base view is one of oversupply in 2026, with a possible drop towards $50 a barrel; however, this scenario could be reversed by geopolitical shocks and any tighter restrictions on Russian exports.

Global stock markets, meanwhile, over the 2024-2025 two-year period were characterised by the rally in stocks tied to artificial intelligence, which could be compared to the dot-com bubble even though it has much stronger fundamentals and average multiples lower than those seen in the late 1990s. Nevertheless, the risk of corrections remains in some sectors and 2026 could turn out to be the “moment of truth” to see whether earnings and margins will be able to justify the huge investment in data centers and AI infrastructure. The strategic companies, in their respective sectors, are the following: Palo Alto Networks and CyberArk in cybersecurity, ASML in advanced lithography and semiconductors, SMCI in AI infrastructure, Alphabet as a pillar of digital infrastructure, LVMH in European luxury and MP Materials in strategic US rare earths.

In the crypto market, 2025 was a year of consolidation for Bitcoin and growing centrality for Ethereum, thanks to its dominant role in real-world blockchain applications and in the tokenization of assets. 2026 represents the potential beginning of a cycle in which Ethereum could strengthen its relative weight versus Bitcoin over the long term, supported by institutional adoption, a clearer regulatory framework and the protocol’s intrinsic features (staking and a potential deflationary component).

As for Italy, its economy is among the strongest in the euro area, with inflation between 1% and 2%, unemployment at its lowest since the 1980s and a bond market that is highly attractive at the European level. The FTSE MIB was in fact one of the best European indices in 2025, driven mainly by the banking sector and by individual stocks such as Telecom, Iveco, Leonardo and Italgas, while remaining highly sensitive to the performance of US markets and major American tech companies.

Looking ahead, 2026 could be influenced by deteriorating labour market dynamics on a global scale. After the halt to expansionary monetary policies in 2025, due largely to global inflation artificially fuelled by tariffs, it is likely that next year will see the continuation of the adjustments that began between Q1 and Q2 2025, with significant effects on central bank strategies and on investor behaviour. Above all, attention remains fixed on the AI equity sector, where stocks such as Nvidia and Apple today exceed $4 trillion in market value, Alphabet (Google) and Microsoft stand above $3 trillion, while Amazon is above $2 trillion (only Meta is at $1.5 trillion). To give a useful comparison for understanding the level of capitalization of these companies, Nvidia’s exceeds the entire Italian public debt...