Strong markets, shifting foundations and feedback loops

Research evidence excerpt

Strong markets, shifting foundations and feedback loops

16 July 2026

Strong markets, shifting foundations and feedback

loops

1. “Peak Trump” reached with midterm elections unlikely to be a gamechanger

that shifts the policy path.

2. Geopolitics remain fragmented, but rhetoric-reality gap reflects de-escalation

despite “cognitive dissonance.”

3. Structurally firmer inflation and higher term premium leave less room for

policy errors.

4. Financial stability risks migrate to funding markets, cross-border channels and

non-banks and away from the classic bank sovereign nexus.

5. Retail’s larger S&P 500 footprint amplifies the wealth effect and downside

feedback loop.

6. Deregulation is a tailwind, but tech sovereignty is the new regulatory

battleground amid thin AI governance.

7. Labor market’s “new normal” remains unsettled, with younger college

graduates disproportionately exposed.

8. The G2 US-China competition broadens beyond trade and tech as the energy

transition moves back to center stage.

9. US exceptionalism fuels demand for international diversification but cools

appetite for alternative assets.

10. Six Ds shaping the outlook for 2026 and beyond diverge in speed: Deficits,

Deregulation and De-carbonization are accelerating fastest.

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A special thank you to the JPMorganChase Center for Geopolitics and the

JPMorganChase Institute for their contributions to this report. Please see the links for

more information on these subjects.

We would also like to thank Susan Christensen for her research and editorial support