SAN DIEGO, July 07, 2026 (GLOBE NEWSWIRE) -- LPL Financial LLC today released its Midyear Outlook 2026: Policy, Buildouts and Bottlenecks. Setting the tone for the second half of the year, the report provides a comprehensive analysis of the economic and market environment and outlines key considerations for investors navigating an increasingly policy-driven and complex landscape.

The Midyear Outlook underscores how markets are being shaped by the interaction of policy decisions, geopolitical developments and the ongoing evolution of artificial intelligence (AI). As the year progresses, the report highlights how resilient corporate earnings, moderating but positive economic growth, and persistent uncertainty across global markets are likely to define the investment backdrop.

"Policy is once again front and center for markets," said LPL Chief Investment Officer Marc Zabicki. "From U.S. midterm elections to changes at the Federal Reserve, investors will need to carefully assess how evolving policy dynamics influence economic outcomes, market volatility and portfolio positioning."

The report’s base case calls for economic growth to stabilize but remain positive through the second half of 2026, supported by strong business investment even as housing and other rate-sensitive sectors remain challenged. Inflation is expected to ease modestly if geopolitical pressures subside, while unemployment may edge higher but remain historically low.

Against this backdrop, the Midyear Outlook suggests that equities can continue to advance, though gains may be modest and accompanied by increased volatility. Strong AI-driven earnings growth and an improving macro environment are expected to support stocks, but geopolitical developments and the pace of AI monetization will likely influence the depth and frequency of market pullbacks.

At the same time, fixed income markets are expected to remain influenced by persistent inflation and a Federal Reserve that may stay on hold for longer. Treasury yields are projected to stay range-bound, with returns driven primarily by income opportunities rather than price appreciation.

The report emphasizes that, in this environment, diversified portfolios that incorporate equities, fixed income and alternative investments may be best positioned to navigate ongoing uncertainty and capitalize on emerging opportunities.

Key Highlights from the Midyear Outlook 2026

Policy, Geopolitics and Market Volatility:

Policy developments — including U.S. midterm elections, evolving trade dynamics and leadership changes at the Federal Reserve — are expected to be major drivers of market performance in the second half. These forces may increase volatility but also create opportunities as uncertainty resolves.

The State of the U.S. Economy and Potential Risks:

Economic growth is projected to moderate but remain positive, supported by strong business investment tied to AI and structural capital spending. Inflation may gradually cool, while unemployment trends modestly higher, reflecting a slower but still resilient labor market.

Investment Strategies in a Changing Market Environment:

Equity markets are expected to post modest gains as earnings growth — particularly from AI-related investment — continues to provide support. However, elevated valuations, geopolitical risks and policy uncertainty could lead to periodic pullbacks, making diversification and selectivity essential.

Fixed Income and Income Opportunities:

With Treasury yields expected to remain range-bound and the Federal Reserve maintaining a cautious stance, bond returns may be driven largely by income. High-quality fixed income, including core bond sectors, is favored for stability and income generation.

Portfolio Construction and Diversification:

In an environment defined by policy uncertainty, structural change and market dispersion, diversified portfolios — including allocations to alternatives — are increasingly important for enhancing resilience and capturing opportunities across asset classes.

The Midyear Outlook also identifies four key themes likely to shape markets in the months ahead: U.S. midterm elections, the rise of resource nationalism, the transition of AI from buildout to monetization and the challenges facing a new Federal Reserve chair navigating a complex inflation environment.

"There’s still a constructive backdrop for risk assets, but it may come with a bumpier ride," Zabicki added. "We believe investors should focus on staying balanced, maintaining diversification and positioning portfolios to adapt quickly as market leadership and policy dynamics evolve."

Important Disclosures

Please see the LPL Financial Research Midyear Outlook 2026 for additional description and disclosure.

The opinions, statements and forecasts presented herein are general information only and are not intended to provide specific investment advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Any forward-looking statements including the economic forecasts may not develop as predicted and are subject to change based on future market and other conditions.

All indexes are unmanaged and cannot be invested into directly.

All performance referenced is historical and is not a guarantee of future results.

Investing involves risk including the loss of principal. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Alternative investments may not be suitable for all investors and should be considered as an investment for the risk capital portion of the investor’s portfolio. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

About LPL Financial

LPL Financial Holdings Inc. (NASDAQ:LPLA) is among the fastest growing wealth management firms in the U.S. As a leader in the financial advisor-mediated marketplace, LPL supports more than 32,000 financial advisors and the wealth management practices of approximately 1,100 financial institutions, servicing and custodying approximately $2.3 trillion in brokerage and advisory assets on behalf of approximately 8 million Americans. The firm provides a wide range of advisor affiliation models, investment solutions, fintech tools and practice management services, ensuring that advisors and institutions have the flexibility to choose the business model, services, and technology resources they need to run thriving businesses. For further information about LPL, please visit www.lpl.com.

Securities and advisory services offered through LPL Financial LLC ("LPL Financial"), a registered investment adviser and broker-dealer. Member FINRA/SIPC.

Throughout this communication, the terms "financial advisors" and "advisors" are used to refer to registered representatives and/or investment advisor representatives affiliated with LPL Financial.

We routinely disclose information that may be important to shareholders in the "Investor Relations" or "Press Releases" section of our website.

Media Contact:

Media.relations@LPLFinancial.com

(402) 740-2047

Tracking #: 1133744