Markets: Raymond James reaffirms optimism for 2026 and believes that the technology sector continues to have a "strong" outlook

Financial services company Raymond James believes that as far as the financial markets are concerned there are "grounds for optimism" in 2026, also arguing that despite headlines "frequently speculating" about a bubble in the area of artificial intelligence (AI), the organization believes that the long-term outlook for the technology sector "remains strong".

Still on the subject of [technology], Raymond James stresses that periodic volatility is a "normal part" of any innovation cycle and is "unlikely to affect" the financial firm's "constructive view" on equities.

"We maintain a positive outlook for the technology sector - along with the industrial sector, which plays a key role in supporting the expansion of data centers - given the durability and transformative potential of the artificial intelligence megatrend," says Raymond James.

In addition to this, Raymond James has released a list of economic aspects for which it is grateful in 2025, as we approach Thanksgiving in the United States.

On the list is the recovery of the stock markets after Liberation Day in April, when the United States announced tariffs on several trading partners, causing the markets to fall.

"After a volatile start to the year, the stock markets have made an impressive recovery. Since the April lows, when trade war turmoil and recession fears peaked, the S&P 500 [US stock market index] has risen 38%, marking one of the highest six-month highs in history - before the recent correction. If the S&P 500 regains momentum at the end of the year, we could see a rare three-peat - three consecutive years with returns above 20%, a feat last achieved during the bull market of 1995-1999″, points out Raymond James.

Also on the list is US Gross Domestic Product (GDP) growth of around 2%. "Liberation Day (April 2) may have raised fears of recession, but economic growth proved resilient, probably ending the year just below 2%. Tariffs, initially seen as a major threat to American businesses, turned out to be less damaging than expected. Meanwhile, a revolutionary technological leap - artificial intelligence (AI) - helped boost the economy," argues the financial services company.

The list also highlights the current market's three-year bull run, which has seen the S&P 500 register an "impressive rise" of 83% since its inception.

"While sharp market swings and concerns about growth could have destabilized the situation, profits recovered quickly after a brief drop as the economy avoided a recession. The good news: profits continue to rise. With solid fundamentals and expectations of stronger economic activity next year, the outlook remains positive for the bull market to continue into the fourth year," says Raymond James.

Raymond James also lists the first record for small caps in four years. "Small caps had not kept pace with other major US stock indices in setting multiple new records since the start of the bull market. However, that changed at the end of September, when they finally broke that trend, with the Russell 2000 hitting its first all-time high in four years. The catalyst: hopes of interest rate cuts from the US Federal Reserve (Fed) and valuations considered advantageous proved irresistible," the financial services company pointed out.

Oil prices below 60 dollars a barrel are also on the list. "A near-record increase in supply and weak demand, particularly in China, have been the main factors driving the fall in oil prices year-to-date," says Raymond James.

"Oil prices (WTI) are now trading below 60 dollars a barrel, down from the peak of 80 dollars at the start of the year. This is important, as falling gasoline prices are providing consumers with welcome relief in their daily expenses. With national average gasoline prices poised to fall below three dollars per gallon, history suggests this could boost consumer confidence," says the organization.

Added to this are the seven sectors of the S&P 500 [out of a total of 11] that have managed to reach historic highs. "While headlines often highlight tech stocks hitting new highs and market tightness, strength has been widespread across the S&P 500 this year," Raymond James points out.

"Meanwhile, we're keeping a close eye on the healthcare sector, as its 8.75% quarter-to-date gain has propelled it within striking distance (~3.7%) of becoming eighth," Raymond James notes.

Also on the organization's list is real estate financing with interest rates of up to 8%. "The sharp rise in mortgage rates since the lows of the Covid-19 era has been a drag on the real estate sector. Fortunately, 30-year fixed mortgage rates have fallen by almost 2% since their 2023 peak and are now around 6.3%. This drop should help stabilize the sluggish housing market and improve affordability for potential buyers," says the company.

Raymond James also includes on its list the nine trillion dollars in additional wealth for families. "Strong gains in stocks, bonds and (to a lesser extent) real estate prices have significantly boosted household wealth this year," the company points out.

Raymond James estimates indicate that these gains added approximately nine billion dollars to aggregate wealth, "surpassing" previous record levels. "This increase sustained consumption in 2025 and is likely to provide a further boost in 2026," the financial services company predicts.

Also on the list is the inclusion of the ten S&P 500 sectors that are posting year-to-date gains. "The performance of large-cap tech stocks continues to grab the headlines, but the gains have extended well beyond the tech sector. In fact, ten of the eleven S&P 500 sectors are posting year-to-date gains, with the consumer discretionary sector poised to turn positive. Notably, if all eleven sectors end the year in the green, it will be the first time since 2021 - a year defined by the post-Covid economic reopening," Raymond James points out.