Market Outlook - January 2026

Looking ahead, we remain constructive on markets overall but expect more muted growth in 2026 compared with the outsized gains of recent years. Economic growth appears likely to moderate, central banks remain data dependent, and investor expectations are increasingly differentiated across sectors and regions. Against this backdrop, we believe markets are transitioning from a momentum driven environment to one where returns are shaped more by earnings delivery, balance sheet strength, and valuation discipline.

For Canadian equities, we see the S&P/TSX Composite trading within a range of approximately 33,500 to 34,500 over the course of 2026, supported by resilient financials, energy infrastructure, and select industrial exposure, but tempered by slower global growth and commodity related volatility. In the United States, we expect the S&P 500 to remain constructive, but more range bound, with a target range of 7,300 to 7,500, reflecting steady earnings growth offset by higher interest rate sensitivity and less room for multiple expansion. In this environment, we expect volatility to create opportunities rather than signal deterioration, reinforcing the importance of patience, selectivity, and a focus on quality as markets continue to reprice risk.

If you would like to receive a full copy of our January 2026 market commentary, please email us at msbwealth@nbpcd.com