$S&P 500(.SPX)$  A strong January does tilt probabilities in favour of a constructive 2026, but the path is unlikely to be linear.

U.S. equities:

Double-digit gains remain plausible, though harder than in prior years. Valuations are elevated, so returns will depend more on earnings delivery than multiple expansion. Expect higher volatility and sharper rotations rather than a broad, smooth rally.

Relative performance:

The U.S. may outperform on absolute earnings quality, but could lag selectively versus parts of Asia and Europe where valuations are lower and policy cycles are more accommodative. Leadership may narrow rather than broaden.

AI leadership rotation:

Near term, memory and infrastructure stocks benefit from capacity tightness and pricing power. Over the medium term, leadership should rotate towards profitable SaaS and platform companies that can monetise AI adoption at scale, not just enable it.

Base case for 2026:

Positive but uneven returns, sector rotation over index chasing, and discipline rewarded over momentum. The January signal sets the tone, but fundamentals will decide the ending.