Why Deutsche Bank says 2026 promises to be anything but boring

Investing.com -- Deutsche Bank is preparing clients for a volatile but opportunity-filled next year, saying “2026 promises to be anything but dull.” 

Analyst Jim Reid argued in a note that “rapid AI investment and adoption will continue to dominate market sentiment,” adding that given the speed of technological change, “it is difficult to believe this won’t translate into meaningful productivity gains ahead.” 

However, Deutsche Bank warned that “markets could swing sharply between boom-and-bust narratives” and said investors should “expect no let-up in volatility.”

While the bank’s economists and strategists are “broadly positive for 2026,” Reid highlighted a standout forecast: “The 8,000 year-end S&P 500 target from our US equity strategist - our most optimistic analyst - is notable given his strong track record.”

Deutsche Bank expects global growth in real terms to mirror 2024 and 2025, but with shifting drivers. 

It said “the United States is projected to re-accelerate” as trade uncertainty eases, tax cuts boost incomes, and growth extends “beyond AI-related capex.” Germany, after years of weakness, is “positioned for one of the most meaningful rebounds among major economies thanks to newly unleashed fiscal stimulus.” 

The analyst highlighted that inflation continues to normalise but is not back to pre-pandemic levels. Deutsche Bank expects the Fed to deliver “only two further cuts before pausing.” 

Meanwhile, AI remains central, with equity strategists forecasting S&P 500 EPS of $320 and a year-end target of 8,000, while the dollar’s bull run is expected to keep “fading.”