Ongoing military actions in the Middle East have increased investor uncertainty. Of course, geopolitical risk has always existed, and this time is no different. But the impact of events like these on U.S. investors will vary depending on the lasting effects on fundamental drivers of returns, such as job creation, inflation, economic growth, and corporate earnings.

On Friday, the Supreme Court struck down most of the tariffs the Trump administration had imposed over the past year. The question before the court was not whether the tariffs themselves were illegal, but whether the mechanism by which they were enacted was legal. By a 6-3 vote, the Justices determined that the implementation of tariffs under the International Emergency Economic Powers Act (IEEPA) went beyond the authority granted. The IEEPA allows a president to act in times of genuine national emergencies rather than to take broad trade policy actions. For example, it was enacted during the post-9/11 war on global terrorism and after the Russian invasion of Ukraine.

The early months of 2026 have proven interesting for investors, with no shortage of news affecting the markets. In this month's episode of the Market Observatory, Sam and I break down an investing landscape marked by shifting risks and solid fundamentals, plus what it all means for the path ahead.

After much speculation and wild swings in market expectations, President Trump has nominated Kevin Warsh as his Fed chairman. If confirmed, he is expected to replace current Chair Jerome Powell in May at the end of his term.

At a recent advisor presentation, I was asked an interesting question about this year’s consensus upbeat outlook and what could happen if it doesn’t come to fruition. Indeed, you can make the case that consensus coming into 2026 is sanguine. U.S. GDP growth is expected to be around 2 percent, with some economists forecasting even higher growth due to the benefit of fiscal stimulus from the One Big Beautiful Bill Act. It is challenging to find anyone calling for a U.S. economic recession, despite concerning trends in employment and inflation. Certainly, this outlook contrasts with that of late 2022, when almost everyone was forecasting a recession in 2023. That recession never materialized. The lesson? The consensus view isn’t always right. 

As we approach the Fed's next meeting at the end of January, what do we expect the central bank to do about rates? In this month's Market Observatory episode, Sam and I talk about the likely path ahead, the tug-of-war between headlines and fundamentals, and how a pause on rates may shift investor focus to corporate earnings, which continue to beat expectations.

As we get ready for 2026, investors are faced with some uncertainty about the path ahead. Consumer confidence has deteriorated, the jobs market seems to be slowing, and inflation has started to tick up. But against this backdrop, the market still seems positioned for another year of solid gains. So, what are the risks—and the opportunities—as we begin a new year?

As we enter 2026, we do so with the combined power and efforts of LPL Financial and Commonwealth. In the spirit of that partnership, we encourage you to check out the LPL Research team’s 2026 Outlook,* available now. I think you’ll find the team’s analysis and insights to be valuable as you help clients plan for the year ahead. With that same goal in mind, I’d like to provide my thoughts on what investors can expect in 2026. 

The government shutdown is over, but when will the economic data return? That's the big question for the Fed—and for investors. In this month's episode of the Market Observatory, Sam and I discuss which economic data we're likely to see soon, what the quality of that data will be, and whether there are some reports we may not get at all.

The government shutdown came to an end last night after 43 days, making it the longest shutdown in history. We will leave it to the political commentators to pass judgment on what it means for the decision-makers in Washington. From our perspective, though, we recognize that the shutdown was beginning to have a significant impact on the economy.