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Generated on August 16 at 12:00 AM

U.S. Stock-Market Macro Outlook: August 2026–Mid-2027

U.S. equities enter an earnings-dependent, higher-for-longer rate regime. Baseline expectations are for trend-like real GDP growth near 2.1%–2.4% in 2026–2029 with no imminent recession, but inflation—signaled by 5.5% YoY PPI—remains too high for aggressive Fed easing. The most likely outcome over the next 6–12 months is positive nominal growth, moderate real growth, sticky inflation above target, limited Fed cuts (~50 bps), and elevated long-end Treasury yields. In this environment, equity performance hinges on whether strong earnings can offset valuation pressure from high real yields and term premium. Key downside risks are (1) persistent inflation forcing tighter or prolonged restrictive policy and compressing equity multiples, and (2) late-cycle labor and consumer weakening that triggers earnings downgrades and a broader correction. Treasury yields, labor-market data, pipeline inflation, consumer spending, housing, tariff policy, and market breadth will determine which of three main scenarios plays out: a soft-landing with slow disinflation (baseline), an inflation-persistence / higher-for-longer regime, or a labor-driven recession repricing. Overall stance: constructive but fragile for U.S. risk assets.

This report is intended for informational purposes only, not financial advice. For tailored guidance, please consult a qualified financial advisor.