Rationally Exuberant Markets Will Be Risking AI Mishaps in 2026

Investors were rationally exuberant in 2025. US consumers remained remarkably resilient, keeping the world’s largest economy out of recession. The tariff blizzard waxed and waned, eventually settling at levies still compatible with maintaining global growth, albeit at an anemic level. Central banks around the world eased monetary conditions, helping to slow an increase of government bond yields amid increased sovereign debt supply. The value of global equities set a fresh record. The coming year, though, looks less positive.
Artificial intelligence is the known unknown. It may spark a productivity revolution for its users; it could sink its creators under unsustainable debt loads, with the increasingly incestuous financial tangle between chip makers, data centers and AI model makers setting up a potentially disastrous domino effect in equities and credit. Cheerleaders argue it’s akin to building a transport network for ideas, but as historian Eric Hobsbawm wrote about the explosion of railway projects in The Age of Revolution, his study of 1789 to 1848: “Most yielded quite modest profits, and many none at all.” While we’re not ready to turn bearish on markets, bullishness is becoming an increasingly low-conviction stance.