BCA: Friendliest Fed Meets Narrowest Rally - 10 Key Views For 2026

Authored by Dhaval Joshi via BCAResearch.com,

I get high with a little help from my friends, sang the Beatles. The Lennon-McCartney ditty says everything you need to know about the stock market in 2025. Contrary to the popular narrative, the main driver of the market has not been Trump’s trade war. Nor has it been AI euphoria. The main driver of the stock market has been the ebb and flow of the US real interest rate (Chart 1).

Key View 1: Down Years Are Rare