4 predictions for 2026
- - 4 predictions for 2026
Hamza ShabanJanuary 2, 2026 at 3:00 AM
0
This is The Takeaway from today's Morning Brief, which you can sign up to receive in your inbox every morning along with:
What we're watching
What we're reading
Economic data releases and earnings
There are things we know are coming this year. The end of the Jerome Powell-era at the Federal Reserve, for instance.
And then there are things likely to happen, like Elon Musk taking his rocket company SpaceX public, in a nifty inversion of his taking Twitter private.
Along the way, we'll get updates and evolutions of all the narratives that drove headlines in 2025. Naturally, there's bound to be twists and turns that nobody can foresee (2025's giant dip and recovery, anyone?). So obviously, take these 2026 predictions with a healthy dose of skepticism — and as a way to frame some of the things we're watching.
The tech giants push through the AI bubble talk
It pays to be big.
For all the chatter about an AI bubble and renewed investor skepticism about data infrastructure spending, the tech giants aren't changing course.
Why would they? Their highly profitable businesses in advertising, e-commerce, software, and the cloud provide an ample cushion to pursue the (still as-of-yet unprofitable) business model of peddling LLMs.
The bubble talk won't subside.
But it probably won't be the tech giants that falter or face some kind of existential financial reckoning. That's what the smaller tech players and the pure-AI companies will be left to deal with.
Powell doesn’t get to see his engineered soft landing
With only a handful of policy meetings to go under his leadership, it's natural to think of what Fed Chair Jerome Powell's legacy will be.
His standing up to the White House in his signature, reserved style, just as Congress and other institutions acquiesced or were diminished, comes to mind.
But ask him about it, as a reporter did at the December Fed meeting, and you'll get nothing more than his by-the-book goals: to leave his successor with an economy in good shape and inflation on its way back down to 2%.
Director of the National Economic Council Kevin Hassett is still thought to be in pole position to succeed Jerome Powell as Fed chair. (Photo by Anna Moneymaker/Getty Images) (Anna Moneymaker via Getty Images)
He won't get to see that by the time his term expires. And the political messiness that will inevitably come from the next Fed Chair's installation will likely overshadow whatever progress comes next with inflation.
Prediction markets blow up — but so does the pushback
Not to be outdone by Robinhood (HOOD), Coinbase (COIN) is getting in on the prediction market excitement by partnering with Kalshi, allowing users to trade on the outcomes of real-world events.
"Who will successfully take over Warner Brothers?" The money is on Netflix.
In one sense, the growth and accessibility of prediction markets is a novel way to measure sentiment, using the logic of markets to suss out what people believe.
A range of other yes-no contracts, from the next Trump cabinet departure to whether cannabis will be reclassified as a lower drug, highlights how people can monetize their interest in current events — and their intuition.
But the tandem growth in sports betting has also prompted a public backlash over instant, mass gambling. That same criticism is aimed at prediction markets, raising questions over misconduct, the coverage of the probabilities influencing their outcomes, and of new financial instruments intruding into more aspects of our lives.
The Musk trade expands — and diversifies — in a SpaceX IPO
If investing in Tesla is just a way to invest in Elon Musk, will the debut of his rocket company help or hurt the automaker's prospects?
In 2026, the Musk trade will undoubtedly expand. But not just because this coming year feels like it's shaping up to be the Year of the Robotaxi.
A forthcoming SpaceX IPO will give shareholders another way to back Musk, even if that means diverting excitement away from Tesla. It's going to be a monumental event: SpaceX's Wall Street launch would mark the largest IPO ever. And it would grant Musk another huge pool of capital to achieve his Martian dreams.
CAPE CANAVERAL, FLORIDA, UNITED STATES - DECEMBER 9: A SpaceX Falcon 9 rocket carrying a classified payload for the National Reconnaissance Office (NRO) launches from pad 40 at Cape Canaveral Space Force Station on December 9, 2025 in Cape Canaveral, Florida. This is the second NRO mission launched by SpaceX as part of the National Security Space Launch (NSSL) Phase 2 contract awarded in August 2020. (Photo by Paul Hennesy/Anadolu via Getty Images) (Anadolu via Getty Images)
Taking Twitter private and shaping it into X granted Musk a new level of influence.
Ironically, taking SpaceX public would grant him even more, further entangling and aligning his fortune with the priorities of the federal government. That's one way to stay rich and powerful.
SpaceX's potential success might also offset whatever delays or hiccups flow from 2026's much-anticipated production of Tesla's Robotaxi.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance
Source: “AOL Money”
