Does 2025 signal the end of US equity dominance?

Josh Groves

16th November 2025

Written by Josh Groves

So, as we enter the final month of 2025, it becomes a conventional time to assess equity market performance over the course of a turbulent, wobbly year.

It almost feels like it never happened, and is almost forgettable, but equities did struggle early on in Q1, dropping almost 5%. At the time, Goldman Sachs assigned a 40% probability of recession, and fears about AI overvaluation shaped much of the market uncertainty.

However, equity markets rebounded during the middle and early late stages of the year, and recovered beyond expectations.

Now, the outlook looks slightly different, with Wall Street Banks projecting on average 10% growth forecast for equity markets in 2026. Deutsche Bank is the optimist of the lot, with a 16.7% growth forecast.

But with diversification increasingly lucrative, boosted confidence in emerging markets, and strong 2025 European equity results, the question becomes can a rising tide life all boats?

Well, history would tell us no, that not everyone can be a winner. Markets rarely all behave at the same time, and leadership rotates. But perhaps this year could prove unconventionally profitable for all equity markets.

After all, global inflation looks to be cooling, rates are coming down, and GDP estimates remain positive. Yes, there’s talk about an AI-related bubble, but this is speculative and earnings back the increased valuations.

Bank of America is the most pessimistic of the Wall Street giants, expecting only modest growth due to market turbulence that could become a worry if data centre build-outs and AI spending don’t generate the revenue gains that have fuelled so much excitement.

So, clearly there is disagreement about how strong US equity markets, and global equity markets, will perform in 2026.

I can’t give the reader a conclusive answer on how US equity markets will perform in 2026. The case for growth is clearly there, and Wall Street clearly expects it. But then again, they expected growth in 2008, and then what happened?