September 28, 2026   |   LPL Research

As we wrote in our Midyear Outlook 2026: Policy, Buildouts, & Bottlenecks, artificial intelligence (AI) has entered a more advanced phase where the buildout winners may cede leadership to those that can monetize the technology. If the next leg of AI adoption delivers as expected, the AI leaders in the U.S. and emerging Asia will be winners. If not, the hyperscalers making these massive investments may struggle as the investment cycle matures and comes under more scrutiny. Our expectation that scrutiny on AI investments would intensify in the second half of this year was a key reason why our year-end fair value estimate for the S&P 500, at a range of 7,650 —7,750, is on the conservative side.

September 21, 2026   |   LPL Research

To stress-test whether today’s elevated S&P 500 GAAP EBIT margins are structural or cyclical, we look across four industry case studies that each highlight a different margin mechanism. Taken together, these case studies suggest that the margin story is partially structural, partially cyclical, and partially a timing mismatch between investment and expense recognition.

September 14, 2026   |   LPL Research

While additional hikes could create periods of volatility, history suggests that strong economic fundamentals can help offset the headwinds from higher rates. During past tightening cycles, stocks often experienced initial turbulence following the initial rate increase before regaining their footing. As long as economic growth remains intact and recession risks stay contained, equity markets have historically been able to move higher even in a rising-rate environment (although past performance does not guarantee future results).

September 8, 2026   |   LPL Research

This is the loop that gives the bearish case its teeth: higher yields raise interest expense, which widens the deficit, which increases supply, which pressures yields. In economic textbooks this is called fiscal primacy, which is the condition where fiscal policy, not monetary policy, sets the marginal price of duration. It is not fiscal dominance, in which the central bank is compelled to monetize deficits and abandons its inflation objective. The distinction matters enormously. Fiscal primacy is uncomfortable and expensive. Fiscal dominance is a currency crisis. We are firmly in the first regime, and Chair Warsh's Jackson Hole remarks made it clear that he has no intention of entering the second.

August 31, 2026   |   LPL Research

The hyperscaler capex and free cash flow story is fully appreciated by investors, so we won’t belabor the point too much. We will note that negative free cash flow, which consensus estimates expect for most of the hyperscalers in calendar 2026, is not a bad thing in and of itself. If the return on invested capital (ROIC) clears the cost of capital and the expected returns from competing capital projects, then the spending is not only fine, but encouraged. That is the unknown variable here, of course, and we have our doubts on the value creation in the pure finance textbook sense.

August 24, 2026   |   LPL Research

Second quarter earnings results — and it seems fair to call them a blowout — have increased our confidence that the earnings outlook can support stocks over the balance of 2026. Not only has the pace of earnings growth surprised us (we expected a percentage increase in the high 20s), but the guidance was good enough for analysts to raise estimates for the second half and 2027.

August 17, 2026   |   LPL Research

The latest Purchasing Managers’ Index (PMI) readings suggest the global economy is finding firmer footing, but the improvement is being led mostly by the developed world plus India.

August 10, 2026   |   LPL Research

November's midterm elections matter less for the municipal market than the headlines suggest, and that's the point. Unlike the 2025 reconciliation fight, when elimination of the tax exemption was genuinely on the table, there is little appetite or legislative bandwidth in Congress to reopen municipal tax treatment in an election year.