Will the US stock market in 2026 face a rare confluence of multiple positive factors? Opportunities and pitfalls under the trio of interest rate cuts, tax reforms, and AI

【BlockBeats】Wall Street institutions have recently reached a consensus: the US stock market may experience a rare “perfect storm” in 2026. The simultaneous forces of rate cuts, tax reductions, declining inflation, and AI-driven productivity improvements are unlikely to all align at once.

Let’s start with inflation. The latest CPI data from January 12 is highly watched, with expectations maintaining a year-over-year increase of 2.7%. But the key point is that this number could go even lower. Why? Oil prices are falling, housing costs are easing, and the one-time price increases caused by tariffs are fading. Some strategists believe that the downside potential for inflation may exceed market expectations, which directly opens up space for the Federal Reserve to cut interest rates.

The moderate trend in employment is equally important—cooling labor markets actually create policy room for the Fed to further cut rates within the year. As a result, US Treasury yields may decline, financing costs will decrease, and both corporate and consumer investment appetites could be stimulated.

The more aggressive developments are still ahead. Trump’s proposed “Big and Beautiful Act” has a particularly attractive policy design: 100% accelerated depreciation for corporate capital expenditures. This is not a small perk; it signals to companies—investments originally planned for 2027 and 2028 can be brought forward to 2026. The result could be a concentrated surge in capital spending. Goldman Sachs estimates that driven by AI productivity, earnings per share of the S&P 500 could grow by 12% in 2026. In fact, US labor productivity has recently hit its fastest growth rate in two years, and this momentum is expected to continue with AI support.

But don’t be blinded by these positives. The power of AI to replace human labor is rapidly advancing, and once it truly impacts the labor market, worsening employment conditions could become a new black swan. Coupled with structural divergence—some industries taking off while others stagnate—2026 may be a rare window of opportunity, but the risks are equally worth caution.