Crossmark’s Doll Projects ‘High-Risk Bull Market’ in 2026

Crossmark Global Investments Inc. Chief Investment Officer Bob Doll released last week his yearly 10 market predictions for 2026, including a 0.5% increase in U.S. real gross domestic product, inflation remaining sticky and credit spends widening.

According to Doll, top-down economic growth and policy outlooks for 2026 are favorable for risk assets, but “significant care” needs to be taken in investment exposures. He predicted it is possible bond yields will climb if inflation proves sticky, which will have negative effects on risk assets.

Doll recommended watching earnings revisions and Federal Reserve action “like a hawk.” He also opined that it will be important to hold cash for deployment in sell-offs, to expect some yield curve steepening, to buy dips and trim rallies in stocks, and to be prepared for international markets to outperform the U.S. again.

Doll’s 10 Predictions for 2026

1. Economic growth in the U.S. improves from approximately 2.0% to approximately 2.5% real GDP.
2. Inflation remains sticky and fails to make much, if any, progress toward the Federal Reserve Open Market Committee’s target 2% overnight lending rate.
3. The 10-year U.S. Treasury yield trades primarily between 3.5% and 4.5%, as credit spreads widen.
4. Earnings growth falls short of the consensus forecast of 14% gains, and price-to-earnings ratios decline modestly, making it a tougher year to make money.
5. Stocks fail to advance by a double-digit percentage for only the third time in 10 years.
6. The technology, communication services and financial sectors outperform materials, utilities and consumer discretionary.
7. International stocks outperform U.S. stocks for the second consecutive year, which would be the first time in 20 years.
8. The artificial intelligence sector continues to be volatile and erratic, creating another year of elevated volatility.
9. The faith-based share of industry assets under management increases for the 10th consecutive year. (Doll’s employer, Crossmark Global, is a faith-based investment management firm.)
10. Republicans retain control of the Senate but lose the House of Representatives in mid-term elections in November, as Democrats flip at least 20 seats.

Doll’s 2025 Hits and Miss

Reviewing his 2025 projections, Doll said he was correct on about seven out of 10 for the second consecutive year, within his career average of 7 to 7.5. In 2023, Doll was correct on five out of 10 predictions.

Last year brought strong gains across stocks, bonds and commodities, led by enthusiasm for artificial intelligence, stable inflation and strong corporate earnings. However, ongoing volatility from trade policy uncertainties and geopolitical tensions persisted, and among major assets, only oil dropped noticeably.

When it came to Doll’s prediction of equal-weighted portfolios beating out cap-weighted portfolios and value beating growth, Doll wrote he got the first half of that “very wrong.” Equal-weighted portfolios significantly fell behind cap-weighted portfolios due to noticeable gains by various mega-cap stocks.

Another wrong predication was that financials, energy and consumer staples would outperform health care, technology and industrials.

“After a great start to the year on this one, the strong performance of technology stocks and the nice recovery in healthcare rendered this one incorrect,” Doll wrote.