Skip to content Skip to footer
{{r.fundCode}} {{r.fundName}} {{r.shareClass}} {{r.fundType}}
  • See all results
  • See results in Products
  • See results in Insights
.wrapper { display: flex; } .wrapper img { margin-right: 20px; } @media(max-width: 570px) { .wrapper img { display: none; } } .hero-energy-lines { position: absolute; z-index: 1; bottom: 0; right: 0; height: 100%; width: 50%; background-size: 100% auto; background-repeat: no-repeat; } .hero-home .hero-header:not(:last-child){ color: #fff !important; } .hero-home p { color: #fff !important; } .container-custom { position: relative; z-index: 1; } .image { position: absolute; top: 104px; right: 0; bottom: 0; left: 54%; background-image: url('${test}'); background-size: cover; background-position: center; background-repeat: no-repeat; z-index: 0; } .section-wrapper { position: relative; overflow: hidden; padding-bottom: 7rem !important; } @media (max-width: 991px) { .image { position: static; height: 300px; } .container { position: static; } .hero-energy-lines-mobile { position: absolute; top: -486px; } .hero-home .hero-header:not(:last-child) { color: #003169 !important; } .hero-home p { color: #444 !important; margin: 0 !important; font-size: 1.125rem !important; } .hero-home { margin-top: 0; } } @media (max-width: 768px) { .hero-energy-lines-mobile { top: -311px; } .section-wrapper { padding-bottom: 0rem !important; } } @media (max-width: 441px) { .hero-energy-lines { width: 77%; } .section-wrapper { padding-bottom: 0rem !important; } } @media (min-width: 992px) { .hero-home { margin-top: 103px; } .hero-home .hero-body { top: -51.5px; } }

We forecast an environment of moderate economic growth with inflation subsiding sufficiently to motivate continued interest-rate cuts by the U.S. Federal Reserve (Fed) and foster strong corporate profit growth. We still expect stocks to outperform bonds, but recognize the potential for outsized gains has diminished following this year's strong performance that pushed some valuations to extreme levels.

Economy

  • Slowing growth due to U.S. tariffs and tumbling immigration was partially offset in 2025 by fiscal stimulus and continued interest-rate cuts by central banks.

  • We believe economic growth should accelerate moderately in the year ahead and may pleasantly surprise relative to consensus expectations.

  • Tariff headwinds should fade, and important tailwinds are set to blow. These beneficial forces include interest-rate cuts, further fiscal stimulus, low oil prices, a positive stock-market wealth effect, further growth in artificial-intelligence (AI) expenditures and the early stages of an AI-driven productivity boost.

  • Inflation may not fall by quite as much as consensus expectations for 2026, but is expected to slowly ease after an expected peak in the spring.

Growth tailwinds for 2026

Growth tailwinds for 2026

Note: As of 12/01/2025. Source: RBC GAM

Fixed Income

  • Risk premiums embedded in real yields could keep the U.S. 10-year yield from falling meaningfully from here.

  • Our model argues the 10-year yield should theoretically fall from the current 4.0%, but in practice this depends not just on inflation pressures subsiding, but also on a diminishment in concerns about governments' fiscal health.

  • With governments seemingly content to continue running large deficits, we forecast that government fixed-income assets will deliver coupon or cash-like returns.

  • In corporate bonds, the added compensation for taking credit risk is historically small. That said, conditions for sustained spread widening are not present as corporate default risk is low.

U.S. 10-year T-bond yield

Equilibrium range
US 10 year T bond yield

Note: As of November 30, 2025. Source: RBC GAM

Equity Markets

  • Equity markets ultimately found their footing in 2025 and rewarded investors with strong returns in most major markets.

  • The strong gains mean that valuations have been creeping higher almost everywhere, and the overvaluation story is no longer just a U.S. large-cap phenomenon.

  • Valuations are demanding for U.S. large-cap, Canadian and Japanese equities, whereas European and emerging market stocks remain attractively priced.

  • Profit growth will be increasingly critical to sustaining any further advance in the S&P 500. A positive outcome is certainly possible but given that valuations are historically stretched, the market is vulnerable to any disappointment.

Global stock-market composite

Equity-market indices relative to equilibrium
Global stock market composite

Note: As of November 28, 2025. Source: RBC GAM

Get the latest insights from RBC Global Asset Management.

Disclosure
This material is provided by RBC Global Asset Management (RBC GAM) for informational purposes only and may not be reproduced, distributed or published without the written consent of RBC GAM or its affiliated entities listed herein. This material does not constitute an offer or a solicitation to buy or to sell any security, product or service in any jurisdiction; nor is it intended to provide investment, financial, legal, accounting, tax, or other advice and such information should not be relied or acted upon for providing such advice. This material is not available for distribution to investors in jurisdictions where such distribution would be prohibited.

RBC GAM is the asset management division of Royal Bank of Canada (RBC) which includes RBC Global Asset Management Inc. (RBC GAM Inc.), RBC Global Asset Management (U.S.) Inc. (RBC GAM-US), RBC Global Asset Management (UK) Limited (RBC GAM-UK), and RBC Global Asset Management (Asia) Limited (RBC GAM-Asia), which are separate, but affiliated subsidiaries of RBC.

In Canada, this material is provided by RBC GAM Inc. (including PH&N Institutional), each of which is regulated by each provincial and territorial securities commission with which it is registered. In the United States, this material is provided by RBC GAM-US, a federally registered investment adviser. In Europe this material is provided by RBC GAM-UK, which is authorised and regulated by the UK Financial Conduct Authority. In Asia, this material is provided by RBC GAM-Asia, which is registered with the Securities and Futures Commission (SFC) in Hong Kong.

Additional information about RBC GAM may be found at www.rbcgam.com.

This material has not been reviewed by, and is not registered with any securities or other regulatory authority, and may, where appropriate and permissible, be distributed by the above-listed entities in their respective jurisdictions.

Any investment and economic outlook information contained in this material has been compiled by RBC GAM from various sources. Information obtained from third parties is believed to be reliable, but no representation or warranty, express or implied, is made by RBC GAM, its affiliates or any other person as to its accuracy, completeness or correctness. RBC GAM and its affiliates assume no responsibility for any errors or omissions in such information.

Opinions contained herein reflect the judgment and thought leadership of RBC GAM and are subject to change at any time. Such opinions are for informational purposes only and are not intended to be investment or financial advice and should not be relied or acted upon for providing such advice. RBC GAM does not undertake any obligation or responsibility to update such opinions.

RBC GAM reserves the right at any time and without notice to change, amend or cease publication of this information.

Past performance is not indicative of future results. With all investments there is a risk of loss of all or a portion of the amount invested. Where return estimates are shown, these are provided for illustrative purposes only and should not be construed as a prediction of returns; actual returns may be higher or lower than those shown and may vary substantially, especially over shorter time periods. It is not possible to invest directly in an index.

Some of the statements contained in this material may be considered forward-looking statements which provide current expectations or forecasts of future results or events. Forward-looking statements are not guarantees of future performance or events and involve risks and uncertainties. Do not place undue reliance on these statements because actual results or events may differ materially from those described in such forward-looking statements as a result of various factors. Before making any investment decisions, we encourage you to consider all relevant factors carefully.

® / TM Trademark(s) of Royal Bank of Canada. Used under licence.

© RBC Global Asset Management Inc., 2026
rbc-gam-logo
.usmf-disclosure .expandable-arrow.expandable-arrow-right { margin-right: 0.75em; order: -1; } .expandable-without-borders .card { box-shadow: none; } .expandable-container.expandable-without-borders .card .expandable-trigger { padding: 0; } .expandable-container.expandable-without-borders .card .expandable-trigger:hover { background-color: #f2f3f3; } .expandable-container.expandable-without-borders .card .expandable-content-wrapper { padding: 0; } .expandable-container.expandable-without-borders .card .expandable+.expandable { border-top: 0; } .expandable-container.expandable-without-borders .card .expandable-trigger-button-between { justify-content: start; } document.addEventListener("DOMContentLoaded", function() { let wrapper = document.querySelector('div[data-location="insight-article-additional-resources"]'); if (wrapper) { let liElements = wrapper.querySelectorAll('.link-card-item'); liElements.forEach(function(liElement) { liElement.classList.remove('col-xl-3'); liElement.classList.add('col-xl-4'); }); } }) .section-block .footnote:empty { display: none !important; } footer.section-block * { font-size: 0.75rem; line-height: 1.5; }