BofA Global Research Forecasts Stronger

Artificial intelligence investment growth and global policy shifts are poised to drive market returns despite volatility.

2025 has shown to be a strong year in markets — both in the U.S. and abroad — leaving investors wondering how much is left in this rally. The big themes of the past year — uncertain fiscal policy, the artificial intelligence (AI) surge, China’s overcapacity, record fiscal deficits and excess liquidity — are evolving rather than disappearing.

As the world begins to better understand how AI impacts economic growth, inflation and corporate investment, BofA Global Research economists and strategists are bracing for more volatility in 2026. The AI-driven equity boom remains a defining feature of the “K-shaped” economy, adding another layer of risk.

“Despite these lingering concerns, our team remains bullish on the economy and AI,” said Candace Browning, head of BofA Global Research. “We are optimistic on the two most influential economies, expecting above-consensus GDP growth for the U.S. and China. Furthermore, concerns about an imminent AI bubble are overstated, in our view, and we expect AI investment to continue to grow at a solid pace in 2026.”

BofA Global Research’s 10 key macro views shaping 2026

1. More bullish than consensus on 2026 U.S. GDP growth
2. AI boom — but no bubble yet
3. Emerging markets get a boost
4. China’s economy forges ahead
5. Muted S&P returns, while capex surges
6. U.S. Treasury yields could surprise to the downside in 2026; two Fed cuts expected
7. Flattish home prices with risks to the upside; may vary by region
8. Expect volatility, especially as AI impact becomes more clear
9. Private credit returns likely lower in 2026; high yield looks more attractive
10. Copper to perform on tight supply, strong demand

Read more about BofA Global Research's 10 themes for 2026