Last year, the capital markets have become accustomed to Trump and will no longer weigh his words with such care. In our view, the key capital market issues in 2026 will be the new Fed chair and the extent to which the Fed succeeds in securing market confidence. The French political and fiscal drama is likely to continue throughout 2026. In the second half of the year, the focus will then shift to the midterm elections in the US. In any case, Trump will remain with us and is likely to spring a surprise or two before the midterms in November.
On the equity side, we are starting 2026 with almost the same signs as 2025: at the beginning of 2025, the discussion about an AI bubble and high valuations was already in full swing – and 2026 is also starting with the same questions. Crash prophets are omnipresent and valuations remain ambitious. Nevertheless, in our base scenario, we expect a constructive stock market environment, even if the boom phase seems to be over and we are certainly in the final phase of the cycle. At Raiffeisen Research, we therefore expect stock market returns for 2026 to be in the range of 8–10%, with most of this movement occurring in the first half of the year.
After prolonged periods of sharp rises on the stock markets, there are usually increasing calls that such a bull market cannot be sustainable. A major correction or even a bear market must therefore be a logical consequence. However, subjective perception is distorted. Looking at the last few decades, it can be shown that strong bull years are not the exception, but the norm. Not only do stock markets rise in the vast majority of cases, but even when they do rise, growth rates in the region of 20% can be expected. With the exception of the (strong) ATX, the stock market year 2025 thus fell pretty much within the range of what was statistically expected.
Fundamentally speaking, there are many reasons to believe that 2026 will also be a good year for equities. The US economy is slowing down, but a recession is not part of our baseline scenario. Big Tech dominates the earnings cycle, but earnings growth rates should stabilise in line with the long-term growth path. Economic momentum in the eurozone is gaining speed, with noticeable effects from the infrastructure package and increased military spending. In line with our economic outlook, we expect earnings per share in the Euro STOXX 50 to return to low single-digit growth rates. The bullish arguments are the same as those we have outlined in recent months, which is why we are sticking to our previously outlined path for our price targets. In all of this, Austria is geographically and thematically (keyword: sector structure of the ATX) virtually at the epicenter of what will drive growth in Europe in the coming years. Peace or at least a ceasefire in Ukraine, followed by reconstruction activities, would be the icing on the cake.
In terms of sectors, we favour traditional banking stocks and companies in the basic materials and consumer cyclical sectors. However, our oil price estimates imply only limited upside potential for energy stocks.
Author:
Helge Rechberger
Senior Equity Market Analyst
Raiffeisen Research / Raiffeisen Bank International
12 January 2026
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Note
Wiener Börse AG would explicitly like to point out that the data and calculations given in this report are historic values, which do not permit any conclusions as regards future developments or value stability. Price fluctuations and loss of capital are possible in securities trading. The contribution is the personal opinion of the analyst and does not constitute a financial analysis or a recommendation for investment by the exchange operating company, Wiener Börse AG.