July 13, 2026 | LPL Research

As we develop the outlook for the next few quarters, we must assume a more challenging period for the Federal Open Market Committee (FOMC) and its new chairman, Kevin Warsh. In our view, Warsh will likely experience only a brief honeymoon period as he steps into his new role given inflation remains stubbornly sticky, particularly in core categories, limiting the Fed’s flexibility and exposing policymakers to potential criticism if progress stalls. At the same time, the ongoing Iran conflict introduces geopolitical risk that keeps energy markets volatile and inflation expectations elevated. With the crisis extending past 100 days — and potentially receiving an extension after last week’s strikes — continued disruption of the Strait of Hormuz risks compounding price pressures, leaving Warsh to inherit a policy environment where exogenous shocks, not just domestic demand, are shaping the inflation trajectory. In that context, market participants would be less patient, and the usual grace period for new leadership could vanish almost immediately.

Consumer inflation data underscores just how difficult the path back to price stability will be. The most recent core inflation print from May rose 0.2% month over month, keeping the annual rate just under 3%, which is psychologically important but still meaningfully above the Fed’s 2% target. Headline inflation climbed to 4.2% year over year, the highest since mid-2023. Inflation was driven heavily by rising gasoline and energy costs. While energy is often volatile, the concerning element is broader pressure in services, particularly medical care, which continues to push higher even as health insurance costs have moderated over the past six months. Transportation costs are another stress point, reflecting both strong travel demand and elevated fuel prices. This mix of resilient demand and supply-side shocks creates a “no easy wins” backdrop for policymakers, where inflation declines only gradually and unevenly.

In short: the deeper challenge for Warsh — and for the Fed more broadly — lies in the persistence of services inflation. Services inflation is slower to adjust, and sustained progress toward the 2% target will require a meaningful cooling in services, which remains elusive. The risk in the current environment is that prolonged geopolitical stress keeps energy prices elevated through the summer, amplifying second-order effects across sectors and complicating the Fed’s policy calculus, leaving rates on hold as a result.

June 29, 2026 | LPL Research

A strong quarter across major indexes. The second quarter is winding down and what a quarter it has been with the S&P 500 up 12.6% quarter to date, while the Nasdaq-100 and Russell 2000 are both up over 20%. Despite some twists and turns, the path of least resistance for stocks broadly remained up and to the right for much of the last three months.

The SpaceX IPO sparks the exuberance question. The powerful rally and the blockbuster initial public offering (IPO) of Elon Musk's SpaceX (SPCX) have sparked the question whether market optimism has become excessive. To quote the thirteenth Chair of the Federal Reserve, Alan Greenspan, who passed away just one week ago and in 1996 famously asked: "How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions?"

Assessing the current environment. While we do not think the stock market is in a dot-com-style bubble, the Maestro's question is a fair one.

June 22, 2026 | LPL Research

A hawkish debut. At his first Federal Open Market Committee (FOMC) meeting, Chair Kevin Warsh paired a hawkish, minimalist tone — tersely emphasizing price stability — with the launch of five task forces to review key aspects of Federal Reserve (Fed) policy. Many Fed governors want to follow the Bank of Japan’s lead and hike rates in the near term.

Uncertainty in projections. While officials’ projections show a split on future rate hikes and a higher path for rates, alongside elevated inflation forecasts, uncertainty remains high, underscored by Warsh’s decision not to submit projections. Importantly, with inflation seen as partly supply-driven, the Fed could turn less hawkish if geopolitical tensions ease.

Constructive ambiguity and growth. Overall, the Fed appears to be shifting back toward “constructive ambiguity,” with the outlook hinging on Middle East developments and a steady, near-trend growth backdrop supported by investment and productivity gains. We show that the infrastructure buildout is supporting growth while soft Chinese demand is suppressing oil prices.

June 15, 2026 | LPL Research

The U.S. initial public offering (IPO) market appears to be entering one of its most consequential periods in years. After a long drought following the 2021 issuance boom, a healthier macro backdrop, improved risk appetite, and a long queue of mature private companies have reopened the new-issue window. The potential 2026 class is unusual not only because of the number of companies considering public listings, but because several would be large enough to matter for major equity indexes, passive fund flows, and the broader market narrative around artificial intelligence (AI).

An important piece of framing we’d like to re-iterate upfront is that we are not making any judgment (or recommendations) about specific IPOs, or even IPOs broadly. That said, we remind readers of what the IPO process is designed to do: raise capital and create liquidity for the issuer and existing shareholders. Historically, new issues have produced a wide range of outcomes. Some of the market’s great companies became public companies through IPOs, but the first year after listing has often been volatile, and median performance has historically tended to trail the simple average because a relatively small number of large winners can skew the data.

Here, we explain the mechanics of the IPO process, review several high-profile candidates that may be planning to come to market, discuss why the 2026 issuance wave could matter for market structure, place the current environment in historical context, and provide an analytical framework for thinking about new issues. We are not making a recommendation on any individual company. Instead, we aim to provide a general framework for understanding IPO dynamics and considerations as companies transition from private to public markets.

June 8, 2026 | LPL Research

Since the onset of the Iran conflict (through last Friday’s close), the U.S. Treasury curve has experienced a meaningful bear flattening with front end yields rising more than back-end yields. The 10-year Treasury yield has increased by approximately 60 basis points (bps), while the 2-year yield has risen by 77 bps. These moves represent a swift repricing that incorporates several factors: rising inflation expectations tied to energy price volatility, an increase in compensation demanded for uncertainty (known as term premia); and a fundamental reassessment of the path for short-term policy rates.

That the increase in yields is not solely a function of inflation fears is important (as discussed later). Market participants have also layered in expectations for stronger real growth in the near term, possibly supported by ongoing investment in the artificial intelligence buildout. Simultaneously, geopolitical risks and fiscal concerns have contributed to higher term premia, reminding investors that rate volatility could remain elevated.

Importantly, these yield increases have been orderly. Despite the geopolitical catalyst, liquidity in core fixed income markets has held up, with no evidence of acute stress in funding markets or forced selling. This resilience underscores that the market is processing information in a measured and efficient way.

June 1, 2026 | LPL Research

Before digging into what we think this stock market is worth, it’s important to recognize that valuations have not historically been good timing tools. There is essentially no correlation between valuations and where stocks will go over the subsequent year. However, P/Es have value as a basic valuation tool, especially as it pertains to predicting long-term returns. But it requires context. It’s easy to say that the S&P 500 at a forward P/E of over 21 (based on the consensus S&P 500 earnings per share estimate for the next 12 months) is high based on historical averages. But this approach importantly lacks context around where we are in the economic cycle, the levels and outlooks for inflation, interest rates, earnings, and corporate America’s capital intensity.

Perhaps the easiest one of these drivers to tackle is rates. A higher 10-year Treasury yield has historically correlated with lower P/Es, as shown in the “Higher Yields Tend to Drag Down Stock Valuations” chart. This intuitively reflects the time value of money — future earnings (or cash flows) are worth less today at higher interest rates than they would be at lower rates, and the required return threshold to justify equity risk is higher.

May 26, 2026 | LPL Research

At the start of the 21st century (approximately 2002–2012), commodities broadly went through a massive investment cycle. Given the cycle drove run-ups in the price of most every commodity market, including both agricultural and non-agricultural commodities, this cycle is commonly referred to as a commodity “super-cycle.” This period was powered by increased demand for commodities broadly from emerging markets, primarily China’s rapid industrialization and urbanization at the time. Increased demand drove prices higher, as the supply impulse couldn’t respond quickly enough. However, in typical cyclical industry fashion, that supply response did eventually come, creating a “Lost Decade” (approximately 2012–2020) for commodity price performance. The incremental global supply that came to market coincided with several headwinds, creating a “double whammy” for commodity markets broadly. Those headwinds included: decelerating growth from China; a stronger dollar; lower energy costs from the U.S. shale boom; and waning institutional investor interest in commodity investments. Additional headwinds, specific to agriculture, include technological advances in farming and some of the best growing conditions seen in a century. The “Commodity ‘Super-Cycle’ and ‘Lost Decade’ Defined First Two Decades of 21st Century” chart illustrates cumulative returns for agricultural commodities during these periods.

May 18, 2026 | LPL Research

The Middle East war is expected to exert a modest but meaningful drag on near-term growth through renewed supply chain disruptions, higher shipping costs, and increased uncertainty around energy and trade flows. While the shock does not appear large enough to derail expansion, it will likely weigh on activity at the margin, particularly in trade-sensitive sectors and industries reliant on timely delivery of intermediate goods like fertilizer and steel. Our forecast assumes these disruptions subtract 0.2 percentage points from second quarter real gross domestic product (GDP) growth, reflecting delayed shipments, higher input costs, and a cautious inventory response from firms. Consult the Economic Navigator (May edition) for more context.

May 11, 2026 | LPL Research

LPL Research explores how a potential Warsh-led Fed could reshape policy, Treasury markets, and volatility amid rising deficits and shifting demand.

The Post-Powell Transition: As Jerome Powell’s tenure as Federal Reserve (Fed) chair draws to a close, markets are beginning to look beyond the familiar playbook that has guided monetary policy for much of the past decade. A likely transition to a Kevin Warsh–led Fed would represent more than a change in leadership — it could signal a shift in how the central bank interacts with markets, balances transparency with discipline, and defines its own role in the financial system.

A Smaller Fed Footprint: Warsh has consistently argued for a smaller Fed footprint, less explicit guidance, and a greater role for market price discovery. These priorities arrive at a delicate moment, as Treasury supply remains elevated and fiscal concerns are becoming harder to ignore.

Implications for Investors: For investors, the post-Powell era may be defined less by what the Fed promises and more by how markets respond when those promises are pared back, raising important questions about volatility, yields, and the true cost of capital in the Treasury market.

May 4, 2026 | LPL Research

A frenzied week of macroeconomic data and big earnings news offered glimpses under the hood of both the U.S. economy and some of corporate America’s highest profile companies. Here we’ll focus on the latter, as last week brought eagerly anticipated quarterly results from mega-cap artificial intelligence (AI) hyperscalers Alphabet (GOOG/L), Amazon (AMZN), Meta (META), and Microsoft (MSFT), as well as Apple (AAPL). While scrutiny on capital investments remains high, takeaways from results broadly leaned positive, in our view.

Alphabet grabbed the spotlight among last Wednesday’s reports as the Google-parent company blew past Wall Street’s expectations. High demand for cloud and AI offerings drove a “meaningful acceleration” in growth, indicating to investors that significant AI investments are paying off. Worries that their main business line — Google search — could be taken over by chatbots, ebbed on signs that the firm has successfully integrated AI into its search offering, while also driving down costs to answer users’ questions with AI.

Strong growth in Amazon Web Services highlighted the e-commerce giant Amazon’s report. The unit accounts for most of Amazon’s operating profit, and intense demand for AI computing power drove the fastest quarterly sales growth since 2022. Online sales, which still make up the largest share of revenue for Amazon, rose 12% last quarter.

April 27, 2026 | LPL Research

The “American Industrial Renaissance” is an investment theme investors and allocators alike have probably been pitched several times, or at the very least heard about. Supply chains for manufactured goods have evolved to become more complex, while U.S. manufacturing employment as a share of total employment has steadily declined, leaving policy makers to grapple with the ramifications of a shrinking manufacturing base. Facing effects ranging from structural employment shifts to fragile supply chains to national security, over the last decade, Washington has been both vocal and active about bringing manufacturing back stateside.

This has left investors to explore if we’re actually seeing an “American Industrial Renaissance.” If so, what forces are driving it, and what economic indicators can markets turn to in order to confirm (or deny) it?

April 20, 2026 | LPL Research

The U.S. bond market represents less than half of global fixed income outstanding, yet many portfolios remain overwhelmingly concentrated in U.S. Treasuries and credit, effectively tying outcomes to a single fiscal authority, a single central bank, and domestic yield curves. Expanding beyond U.S. borders meaningfully enlarges the opportunity set. Non‑U.S. developed markets and emerging economies operate under differentiated monetary regimes, demographic profiles, and business cycles, creating dispersion in yields, duration profiles, and policy paths that can be harnessed through active allocation.

Emerging market debt and hedged non-U.S. developed market debt offer compelling income potential and diversification benefits, supported by lower correlations to both U.S. Treasuries and U.S. equities when constructed thoughtfully.

Recent geopolitical developments have further improved the value argument of global investing within fixed income markets. Escalating tensions surrounding Iran and broader instability in the Middle East have driven periodic spikes in energy prices and have put upward pressure on bond yields through inflation expectations and term premia. In many non-U.S. developed countries, bond yields — despite falling on Friday following the announcement that the Strait of Hormuz was open to commercial traffic — remain among the highest levels seen in decades, offering both income and potential price appreciation opportunities.

Currency, credit, and liquidity risks are inherent in global fixed income and must be managed selectively, but they also represent sources of return for disciplined investors.

April 13, 2026 | LPL Research

Outside of energy commodities, capital markets posted a downbeat March as cross-asset volatility spiked in response to the outbreak of hostilities in the Mideast, and kicked off April in similar, choppy fashion before posting a swift bounce following last Wednesday’s two-week ceasefire agreement. While a positive breakthrough, it may still be a little too early to sound the ‘all clear’ as the flow of oil through the Strait of Hormuz remains constrained. Don’t forget, behind today’s headlines, the economy is still dealing with negative trade and immigration shocks and a positive artificial intelligence (AI) shock.

Persistent market stress tends to follow when risks transmit into the real economy through slower growth, shifting inflation dynamics, weakening labor markets, or tighter financing conditions. If volatility remains contained — without a sustained tightening in financial conditions or a measurable deterioration in economic indicators — the macro impact is usually limited. The focus, therefore, should be on monitoring the transmission mechanism from risk to economic activity, not the catalyst itself.

April 6, 2026 | LPL Research

As strikes on Iran continue and the Strait of Hormuz remains effectively closed, it’s clearly too early for market watchers to stop thinking about geopolitical risk. As discussed in recent commentaries but worth repeating, history shows stocks often recover quickly from wars and other military engagements, especially when economies are resilient and earnings fundamentals remain strong. Improved valuations, the strong earnings outlook, and a still-normal level of volatility suggest the risk‑reward backdrop for stocks is getting more favorable. That said, we don’t have market capitulation signals flashing (washed-out selling), nor do we have any more clarity on how the Strait of Hormuz opens up. For now, we believe the best course of action for investors is to be patient and wait for a better entry point to add equity risk.

March 30, 2026 | LPL Research

Earnings drive stock prices over time, but not all the time. Clearly, we’re in an environment where stocks are moving on developments in the Mideast and related moves in oil prices and interest rates. At the risk of writing about something that markets may not care much about right now, here we share some thoughts on the upcoming earnings season and the earnings outlook for the rest of the year.

Despite the sharp rise in oil prices and interest rates in March, our expectation is that the upcoming earnings season will be solid. While companies with business models sensitive to oil and rates may strike a more cautious tone in their outlooks, we expect to again be impressed by the resilience of corporate America, bolstered by our energy independence.

Our confidence in the earnings outlook for 2026 has not wavered, and future earnings are available to investors at a discounted price following the stock market pullback. While today may not mark the stock market low, and our technical analysis work points to heightened risk of some additional near-term downside, our belief that 2026 will be a good year for stocks on the back of solid economic growth and strong earnings has not changed. Once a path to ending the conflict becomes clear and oil and interest rates come back down, stocks should get a nice jolt to the upside as earnings recapture investor attention.

March 23, 2026 | LPL Research

Corporate credit markets have become unsettled about the potential for advanced agentic AI tools from firms such as Anthropic and OpenAI to automate functions across legal, analytical, marketing, and sales workflows, effectively targeting the software as a service (SaaS)/enterprise software space.

Those concerns are highest within the private credit market, and that market is confronting its most meaningful stress test since becoming a dominant source of non‑bank financing, with an emerging wave of redemption pressure providing the clearest early signal of underlying liquidity mismatches.

The suspension of redemptions across several large non‑traded vehicles has exposed how appraisal‑based valuations, limited secondary‑market liquidity, and concentrated exposures in enterprise software can interact in a higher‑rate environment.

March 16, 2026 | LPL Research

The latest data from the U.S. Energy Information Administration (EIA) shows that the U.S. has firmly established itself as a net exporter of total petroleum products, a shift that first occurred in 2020 and has continued for several years. In 2024 (the latest data from the EIA), U.S. petroleum exports averaged just under 11 million barrels per day, exceeding imports of about 8.4 million barrels per day, marking the fifth consecutive year in which the U.S. held net exporter status. This structural change reflects not only higher domestic production but also the growing role of refined petroleum products and liquids flowing to global markets. As the U.S. continues to expand its export footprint, it becomes less impacted by oil price shocks that have historically weighed on domestic economic performance. For a deeper dive, consult the March Economic Navigator.

Globally, however, not all advanced economies share this strategic position. Japan, in particular, remains acutely exposed to international oil market volatility because it relies on imports to meet over 90% of its crude oil needs, with approximately 88% coming from the Middle East. This heavy dependence puts Japan in a vulnerable position as geopolitical tensions and supply disruptions drive price uncertainty. Oil prices converted to the weakening yen also compound the negative impacts on the Japanese economy. The yen is over 4.5% weaker against the dollar since mid-February. Among the Group of Seven (G7) economies, only Canada and the U.S. are net exporters of petroleum products, while Japan — along with Germany, France, Italy, and the U.K. — remains a net importer and is therefore more sensitive to global price spikes. In the current environment, the U.S. benefits from a partial buffer against oil shocks, while Japan must navigate heightened risk as global energy markets fluctuate.

March 9, 2026 | LPL Research

In our 2026 Outlook: The Policy Engine, we listed several risks to stocks that could prevent the S&P 500 from achieving our forecast for high-single-digit returns in 2026 (to a fair value target range of 7,300–7,400). One was narrow stock market leadership. Well, as mega cap technology leadership faded in recent months, the cyclicals and defensives picked up the slack. The traditional market-cap-weighted S&P 500 Index is down 1.5% year to date as of March 6, 2026, but the average stock in the index is up 3.2%.

March 3, 2026 | LPL Research

Looking beyond recent dividend strategies' performance, LPL Research asks and answers the question, “How should I think about dividend stocks or building an equity income portfolio?”

Key Takeaways from this market commentary:

· Look Beyond Simple Dividend Yields. Our research shows that building a systematic dividend income strategy based solely on high dividend yields underperforms strategies based on total shareholder yield (dividend + buyback yield) or dividend growth.

· Pay Attention to Price-Based Returns. When analyzing equity income strategies, it is important to consider both sources of total return: current income and price-based returns (i.e., capital appreciation). Myopically focusing on total return ignores many real-world considerations like taxes, transaction costs, and current income requirements.

· Keep Quality Front of Mind. Given the susceptibility of high-dividend strategies to unknowingly fall into value- or yield-traps, we suggest “paying up” (i.e., accepting a slightly lower yield) to increase quality in any equity income portfolio, but especially in one focused solely on high dividend yields.

· What’s Working Today? Dividend-oriented equities remain in strong uptrends, supported by solid momentum and improving relative strength versus the broader market. The simple dividend yield strategy is currently leading on a short term basis, but longer-term relative trends favor continued outperformance from dividend growth and shareholder yield within the dividend stock landscape.

February 23, 2026 | LPL Research

#1: What is Changing in the 2026 SAA?

Our Strategic Asset Allocation is the long‑horizon blueprint that guides portfolios across market cycles. For 2026, we maintain a modest, but slightly reduced, underweight to total equity risk, reduced domestic small caps, increased exposure to developed international and U.S. large value equities, and maintain a purposeful allocation to real assets and select alternative investments. Core high‑quality fixed income remains the anchor. We are measured with longer-duration Treasuries given less stable correlations, which supports a more balanced risk posture at a time when the compensation for taking equity risk is fair but not abundant.

February 17, 2026 | LPL Research

When uncertainty rises, volatility usually follows as the market has a tendency of pricing in worst-case scenarios quickly. AI’s evolution has accelerated rapidly, shifting from novelty use cases to broad, productivity‑enhancing applications across industries. At this stage of the cycle, it appears apparent AI will continue permeating workflows and reshaping how work is executed, though likely without delivering the dramatic “yellow pages” event some investors now fear.

Undoubtedly, there will be disruption as with any transformative technology, but it probably won’t lead to the extinction of the entire software industry, which is what the market is arguably beginning to price in across many companies in the space. Despite the re-rating in price and subsequent risk premium, fundamental deterioration has been relatively minimal. For example, the S&P North American Technology Software Index, home to 110 predominantly larger-cap software companies, is still forecasted to grow revenues this year by 17% and generate free cash flow margins by around 25% (free cash flows divided by revenue).

February 9, 2026 | LPL Research

After a stellar 2025 in which emerging market (EM) equities returned 34%, 2026 is off to a good start with the MSCI EM Index up 7% year to date. Last year’s near doubling of the S&P 500 return was driven mostly by a weakening U.S. dollar, which propped up EM returns, but attractive valuations and artificial intelligence (AI) investment played a role. This week we highlight five reasons we’ve warmed up to EM.

#1: U.S. Dollar Looks Like It Wants to Go Lower
#2: Earnings Growth Is Accelerating
#3: Exposure to AI Boom in Asia
#4: Technical Analysis Trends Are Compelling
#5: Attractive Valuations

February 2, 2026 | LPL Research

The Federal Reserve (Fed) enters 2026 navigating potentially constrained policy conditions as resilient growth and above‑trend inflation intersect with an increasingly unsustainable fiscal trajectory. Fed Chair Jerome Powell emphasized that federal debt growth requires eventual corrective action, even if near‑term market risks remain limited. Rising primary deficits at near full employment further limit long‑run policy flexibility, while expanding Treasury financing needs — and a growing reliance on short‑duration bills — heighten rollover risk and amplify sensitivity to the Fed’s policy rate.

January 26, 2026 | LPL Research

Productivity growth is the key mechanism that allows the U.S. economy to expand above its long‑run trend without reigniting inflation. Recent data show U.S. nonfarm business productivity rising 4.9% in Q3 2025, a surge strong enough to counter inflationary pressures even amid solid economic growth. Beyond containing inflation, faster productivity growth also helps offset structural headwinds from slowing population growth, a shrinking labor force, and an expanding retiree cohort. Technological innovation is poised to provide the backbone for this productivity boost. The U.S. remains among the world’s productivity leaders — it ranks near the top of major advanced economies, placing it ahead of Germany, France, the U.K., Japan, and Canada.

January 20, 2026 | LPL Research

The melt‑up in the metals market that defined 2025 has extended its strength into the early weeks of the new year, reinforcing the commodity sector’s position as one of the leading asset classes across global markets. To the surprise of most, gold outperformed the broader equity market for a third consecutive year, surging roughly 65% in 2025 and far exceeding the S&P 500’s gains. Silver delivered an even more extraordinary performance, posting its best year since 1979 with annual gains near 150% and reaching generational price highs. The rally, however, cannot be attributed solely to a weaker U.S. dollar or the resumption of the Federal Reserve’s (Fed) rate‑cutting cycle in September. Policy dynamics ranging from robust central‑bank gold purchases to evolving trade and geopolitical strategies significantly influenced price action across the metals landscape. Together with structural supply shortages and rising industrial demand, these factors have created a powerful backdrop that continues to shape market volatility and performance. 

January 12, 2026 | LPL Research

Not only did the U.S. economy not take a sudden turn south last quarter, but it’s been doing quite well. Third quarter GDP grew more than 4% annualized, and more solid growth is anticipated in Q4 (though probably not quite as strong). Remember that’s in real terms (inflation adjusted), so add 3% or so of inflation to get a rough approximation of the attractive revenue opportunity. Corporate America delivered more than 8% revenue growth in Q3 2025 and in our view, should be able to do that again in Q4, more than enough to extend the double-digit earnings growth streak—now at four quarters.

AI names, including the Magnificent (Mag) Seven, will again be a significant driver of earnings growth in the fourth quarter. Based on current estimates, about 80% of the 8% expected S&P 500 earnings growth for the quarter will be driven by the technology sector, which excludes several leading AI players including Alphabet (GOOG/L), Amazon (AMZN), and Meta (META). The sector will likely grow its earnings in Q4 by more than 30% when all the numbers are in, though current consensus is 25.8%.

January 5, 2026 | LPL Research

Staying Fully Invested — Hit. Perhaps our most important tactical recommendation last year was to remain neutral equities. While staying neutral all year may seem like a miss in such a strong year, and of course, an overweight would’ve been better, a downgrade was tempting given the volatility last spring around tariffs. So, we’ll call maintaining full equity allocations a win. Tariffs weren’t the only concern, with market concentration, excessively bullish sentiment, high valuations, deficits, and inflation among the many concerns cited by the bears. The Russell 3000 returned 17.1% in 2025.