Quarterly Perspectives - 4th Quarter 2026

As we close out 2026, the 4th quarter INTRUST Quarterly Perspectives offers a fresh look at the tumultuous year we’ve experienced so far with an eye toward what might lie ahead. In this edition, we highlight the impact mid-term elections have had historically on the markets, the concentration of technology stocks in the US stock market, recent Fed actions under Chairman Kevin Warsh, and the changing landscape in bonds.

Financial Planning and Mid-Term Elections

We face a mid-term election in 2026 which has significant potential impacts on the political landscape in Washington DC. Historically, mid-term election years have been rather volatile with below-average performance leading up to the election, but generally performance improves once the election has passed.

Investment Management and Technology Stock Concentrations

The broad-based S&P 500 index is a conglomeration of the 500 largest companies in the US. But, because it is a market-cap-weighted index, it has always been subjected to a concentration of the largest companies. The recent rise in technology companies, particularly those involved with AI, has magnified the concentration risk of the broad index. If the index returns to a “normal” level of concentration risk, how this unwinds will be important to investors.

Economic Outlook and the Fed’s New Direction

Recent Federal Open Market Committee (FOMC) actions have been on the trajectory of lowering the short-term Fed rate, but this year’s conflict in Iran and the resulting increase in inflation spurred the Fed to change direction and raise their rate. Forecasts from the Fed and the market’s expectations differ on the extent of future rate increases, but, for now, rate decreases are not in the outlook.

Investment Management and the Increase in Bond Yields

Higher inflation, increased supply of federal and corporate debt, and concerns over mounting federal debt have resulted in significant increases in the yields of debt. While this has caused some investor pain in the short run, the long-term outlook for bonds has improved for investors.

The INTRUST Quarterly Perspectives are the consensus of the INTRUST Investment Strategy team and are based on third-party sources believed to be reliable. INTRUST has relied upon and assumed, without independent verification, the accuracy and completeness of this third-party information. INTRUST makes no warranties with regard to the information or results obtained by its use and disclaims any and all liability arising out of the use of, or reliance on, the information. The information presented has been prepared for informational purposes only. It should not be relied upon as a recommendation to buy or sell securities or to participate in any investment strategy. The Quarterly Perspectives are not intended to, and should not, form a primary basis for any investment decisions. This information should not be construed as investment, legal, tax or accounting advice. Past performance is no guarantee of future results.