Liz Ann Sonders believes the macro environment will continue to be unstable given policy crosscurrents and a wobbly labor market, but stocks can likely churn higher given a firmer earnings backdrop.
Date published: December 9, 2025
2026 Outlook: U.S. Stocks and Economy
Charles Schwab
Liz Ann Sonders, Kevin Gordon
Research
26 Pages
Key Takeaways
Unstable Economic and Market Cycle: This instability manifests as rapid shifts in key determinants affecting economic sectors and consumers unevenly, leading to a K-shaped backdrop.
Upside Risks to Inflation: Expects inflation will remain sticky and closer to 3% vs. 2%. While the labor market is not yet showing signs of recession-level weakness, affordability pressures continue to mount and labor supply will likely stay under pressure, contributing to monetary policy instability.
Ongoing Sector Rotations: Investors are encouraged to focus on sector diversification away from just Tech and narrative-driven segments in line with expectations of a broadening out of performance.
Join our newsletter to have all of this content + Exclusive Newsletter Bonus Content delivered to your inbox every week
