Corporate earnings have exceeded expectations throughout the first half of 2026, providing the necessary momentum to keep the bull market intact. The Information Technology sector has been a standout performer, fueled by a 49% year-over-year profit increase and heavy capital investment in artificial intelligence. Kelly Bogdanova, Vice President and Portfolio Analyst at RBC Wealth Management–U.S., noted that while earnings have cleared a high bar, investors should remain cautious as the November 3 midterm elections approach. Historical data since 1934 suggests that election cycles often coincide with an average 21% market correction, making volatility a likely prospect in the coming months.

In the fixed income space, rising yields have pushed total returns into negative territory for the year. With 30-year government bond yields averaging above 4.0%—a level not seen since 2009—RBC expects the 10-year Treasury yield to test the 4.8% to 5.0% range. Given that price appreciation for bonds remains unlikely, the firm advises shifting focus toward maximizing income through corporate bonds or bank-issued hybrid preferred securities. Beyond immediate market cycles, RBC highlights five long-term structural shifts, including an AI-driven spending surge projected to hit $668 billion this year, aging global demographics, and a structural increase in defense budgets, as the forces that will define investment strategy for the next decade.