The Bullish Signals That Investors Overlook

The U.S. equity market is entering the early stages of a "rolling recovery," with 2026 positioned as a year of significant economic re-acceleration. A convergence of bullish catalysts—including deregulation, positive operating leverage, and accommodative monetary policy—remains underappreciated by investors who are currently sidelined by sluggish manufacturing data and growth anxieties. Cyclical sectors such as financials, industrials, and small-cap stocks offer the most potential as the three-year rolling recession concludes. Low energy prices, bolstered by geopolitical shifts in Venezuela, provide a crucial economic cushion for consumers, while the Federal Reserve’s pivot to ending quantitative tightening addresses previous liquidity concerns. Despite risks surrounding AI capital expenditure and geopolitical wildcards involving China, the combination of improving fundamentals and light investor positioning creates a favorable risk-reward profile for U.S. equities over the next two years.