Key Terms
duration
financial
Duration is a measure of how sensitive a bond or a bond portfolio’s price is to changes in interest rates, expressed roughly in years. Think of it as the weighted average time it takes to get your cash back from the bond: the longer the duration, the more the bond’s price will swing when rates move, so investors use it like a lever to estimate interest‑rate risk and to balance portfolios accordingly.
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Key Takeaways:
U.S. stocks and economic growth will likely continue to be supported by strong business investment, while consumer spending faces persistent headwinds if the war persists and keeps upward pressure on inflation.
The bond market outlook suggests that investors remain selective, favoring short- and intermediate-term maturities versus long-duration investments.
The global equity market outlook remains positive, driven by ongoing economic expansion and strong earnings growth, but higher inflation, geopolitical turmoil, and market concentration present potential risks.
WESTLAKE, Texas–(BUSINESS WIRE)–
The Schwab Center for Financial Research (SCFR), which provides top-quality research, timely market insights and practical guidance for investors, today announced the release of its 2026 mid-year outlook, Schwab Market Perspective: Mid-Year Outlook, which delivers insights on the most important market and economic trends that investors should consider for the second half of the year.
The Schwab Market Perspective: Mid-Year Outlook provides perspectives on U.S. stocks and the U.S. economy, taxable fixed income, and global equities.
2026 Mid-Year Outlook: U.S. Stocks and Economy
“Considering the interplay between economic trends and stock market behavior, the second half of 2026 is presenting investors with a bit of a split verdict. The earnings backdrop is the strongest it has been in years and although it is concentrated, it is not a mirage. The economy and labor market have remained resilient. However, the index-level signal from the stock market is obscuring a more complicated picture: concentrated earnings growth, record household equity exposure, consumer sentiment at historical lows for everyone outside the stock market, and a bond market that’s increasingly competitive with equities on a risk-adjusted basis.”
Liz Ann Sonders, Chief Investment Strategist, and Kevin Gordon, Head of Macro Research and Strategy, Schwab Center for Financial Research
2026 Mid-Year Outlook: Taxable Fixed Income
“Our broad message for the second half of 2026 is this: Income still matters, but investors should be selective. Despite the recent rise in Treasury yields, we suggest investors favor a below-benchmark average duration with their bond holdings, favoring short- and intermediate-term maturities. In our view, now is not the time to favor long-duration investments just yet.”
Collin Martin, Head of Fixed Income Research and Strategy, Schwab Center for Financial Research
2026 Mid-Year Outlook: Global Equity
“In 2026, economic activity has improved. Earnings growth continues to be strong. Capital investment remains robust. Financial conditions are relatively benign. But those strengths are concentrated, and they exist within a shifting structural regime that could produce ongoing geopolitical pressures and increased inflation risks over the longer term.”
Chris Ferrarone, Head of Equity Research and Strategy, and Michelle Gibley, Director of International Equity Research and Strategy, Schwab Center for Financial Research
Learn more about the Schwab Market Perspective: Mid-Year Outlook here.
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Disclosures:
This material is intended for general informational and educational purposes only. This should not be considered an individualized recommendation or personalized investment advice. Where specific advice is necessary or appropriate, individuals should contact their own professional tax and investment advisors or other professionals (CPA, Financial Planner, Investment Manager, Estate Attorney) to help answer questions about specific situations or needs prior to taking any action based upon this information. The securities and investment strategies mentioned are not suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decisions.
Past performance is no guarantee of future results.
The value of investments and the income derived from them can go down as well as up. Future returns and the achievement of stated goals are not guaranteed, and a loss of principal may occur.
Investing involves risk, including loss of principal.
International investments involve additional risks, which include differences in financial accounting standards, currency fluctuations, geopolitical risk, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate this risk.
Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors. Lower rated securities are subject to greater credit risk, default risk, and liquidity risk.
The policy analysis provided by the Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party.
Diversification and asset allocation strategies do not ensure a profit and do not protect against losses in declining markets.
All expressions of opinion are subject to change without notice in reaction to shifting market, economic or political conditions.
The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.
The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co. Inc. (Member SIPC, https://www.sipc.org), and its affiliates offer investment services and products. Its banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides deposit and lending services and products.
© 2026 Charles Schwab & Co., Inc, All rights reserved. Member SIPC.
0626-XGSH
View source version on businesswire.com: https://www.businesswire.com/news/home/20260618384344/en/
MEDIA:
Kaitlyn Campisi
Charles Schwab
Phone: 929-318-7957
Source: The Charles Schwab Corporation
