2026 will be a ‘stronger year’ for markets, strategist explains

Yahoo Finance Video and Brian Sozzi

December 10, 2025

In this video:

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The Federal Reserve’s December FOMC meeting will conclude on Wednesday, December 10, with investors expecting US central bank officials to vote on a hawkish interest rate cut to end 2025. The decision announcement will be followed by a press conference with Fed Chair Jerome Powell.

Principal Asset Management Chief Global Strategist Seema Shah and Siebert Financial CIO Mark Malek share their perspectives on what a rate cut will mean for the market’s (^DJI, ^IXIC, ^GSPC) Santa Claus Rally heading into 2026.

To watch more expert insights and analysis on the latest market action, check out more Opening Bid.

Video Transcript

00:00 Speaker A

Seema, you a big believer in the Santa Claus rally?

00:03 Seema

Well, I think it really depends on how the Fed is going to be speaking tomorrow. I mean, if he starts to really play out a nice picture of an economy which is fairly constructive, the labor market is maybe slowing a little bit, but not as a major concern. And then also alludes to the idea that there could be further rate cuts like down the line. That is the perfect environment for equities and we certainly could set the foundations for a longer-term rally. Um, but again, as it really does depend on on how he’s going to sound. I think 2026 either way is going to be a stronger year. So even if you don’t get the Santa rally that everyone’s hoping for, that doesn’t mean that 2026 is going to be a disappointment anyway.

00:46 Speaker A

See, let me stick with you. Why do you think next year will be a strong year for markets?

00:50 Seema

Well, we have a constructive macro outlook. You know, we see a bit of policy easing, but ultimately, we think that the fiscal easing that is coming through uh via the tax refunds that are going to uh hit households uh doormats in Q1. The positive impact for corporates from an effective drop in the effective corporate tax rate. Those are really things that you’re going to move the needle. And on top of that, of course, we have the AI CAPEX spending which is expected to continue. So those, as long as you have a positive economic backdrop, well then we think earnings could do pretty well. And so we’re anticipating a broadening out, not just AI, so AI continues to be pretty strong, but also you see other sectors getting in for the ride. So for overall for 2026, we’re pretty risk on. Uh you have to be fairly selective, but ultimately this is going to be, I think a good environment for investors next year.

01:41 Speaker A

Mark, yesterday my man, uh John Stoltz Stoltzfus over at Oppenheimer put out a a really aggressive price target on the S&P 500. I believe it was 8100. He’s looking for more double digit gains. I is that too rich for your blood? Do you see more double digit gains next year or should investors be more measured?

02:00 Mark

Uh no, I think uh I I would agree. I think next year is a very positive year. I agree with what Seema said earlier that, you know, we have the fiscal stimulus that’s really going to sort of kick in next year. I think when people realize how much extra they have in their taxes. I think that’s going to impact uh positively on on consumption. Uh so I think all of that uh and I think again, the Fed which is, you know, they’re they’re doing hawkish cuts, but they’re still cutting, right? They haven’t sort of uh shifted any of that uh just yet. So I think all of that is going to help propel things forward. Uh as long as the Fed, you know, stays on cue and continues to support the market and remind the market that it is focused on being preemptive, uh if things do start to uh to slow down even more in the labor market. But it it should be a very positive year, at least at the point we’re at now from where we can see it today.

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