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Ahead
2026 Escape velocity?
This report has been prepared by UBS AG, UBS AG London Branch,
UBS Switzerland AG, UBS Financial Services Inc. (UBS FS),
UBS AG Singapore Branch, UBS AG Hong Kong Branch, and
UBS SuMi TRUST Wealth Management Co., Ltd. Please see important disclaimers at the end of the document. 5
Dear reader,
2025 was a year of innovation, political upheaval, and market surprises. For the first time in years, China and Europe outperformed US equity markets in dollar terms. Rates fell, and in Switzerland returned to zero, and gold soared to all-time highs. In the US, markets rebounded from trade-driven volatility with AI-linked innovation and spending as notable drivers.
As we enter 2026, the world stands at a crossroads: Can momentum from AI and innovation help markets and
economies achieve “escape velocity,” breaking free from the gravity of rising debt, political uncertainty, and lingering inflation? Or will these forces pull us back to earth? Our Year Ahead 2026 outlook, “Escape velocity?”, is designed to help you spot the signals that matter, cut through the noise, and act with confidence. We see stocks moving higher, driven by powerful trends in AI, power and resources, and longevity. As rates come down, it’s time to refocus on portfolio income. But risks remain. If AI progress slows, inflation picks up again, or debt problems resurface, markets could face new challenges. That’s where we come in. At UBS, our Chief Investment Office is your launchpad, providing the research, insights, and solutions to help you move forward, whatever comes next. Thank you for your trust. Let’s aim even higher in 2026, together.
Co-President Global Wealth Management
and President UBS Americas
Co-President Global Wealth Management
and President UBS Asia Pacific 6
Contents
14 Can AI power the market even higher? 17 Invest in transformational innovation 22 The economic backdrop 26 Add to equities 31 Seek opportunities in China 33 Favor commodities 36 How will governments manage rising debt? 39 Seek diversified income 42 Our currency views for 2026 09 Escape velocity? 13 Growth 35 Income 7 46 How will politics shape markets in 2026? 47 Key risks 48 Scenarios 49 Hedge market risks 51 Diversify with alternatives 58 2025 in review 59 Forecasts 45
Diversification
53 57 8 Escape velocity? 9
Global Wealth Management
In physics, “escape velocity” is the minimum speed an object needs to break free from the gravitational pull of a massive body without further propulsion.
As we enter 2026, investors are asking whether the
powerful combination of AI innovation, fiscal spending, and easing monetary policy can help the world economy break free from the gravitational pull of traditional “end-of-cycle” dynamics and accelerate into a new era of growth. AI is at the heart of the debate. The current boom has the potential to deliver the necessary productivity improvements to overcome historical constraints and help economies achieve their own type of escape velocity. Whether this potential is realized will depend on investors’ willingness to keep funding AI, tech leaders’ ability to monetize innovation, and the world’s capacity to supply the energy needed to power it all.
Figure 1
Can AI power the market even higher? Nasdaq Composite Index (lhs) and weight of information technology sector in S&P 500, in % (rhs) 1990
