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Wilmington Trust's 2026 Capital Markets Forecast: Navigating Economic Experiments

On January 6, 2026, Wilmington Trust published its Capital Markets Forecast, aptly titled "Investing in a Period of Economic Experimentation." This forecast offers a comprehensive analysis of the current economic landscape, marked by significant shifts in policy and market dynamics. As the investment environment evolves due to numerous factors, Wilmington Trust aims to shed light on the potential risks and opportunities for investors.

Key Themes from the Forecast

The report identifies three primary themes that are critical in understanding the current investment atmosphere:

1. Tariffs and Reshoring

The report points to record-high tariffs, reminiscent of those seen post-World War II, as a significant disruptive force. The intention behind these tariffs is to encourage the reshoring of supply chains back to the U.S. While this could potentially invigorate domestic manufacturing and create job opportunities linked to smart manufacturing and automation, the associated risks are non-negligible. Uncertainties stemming from these tariffs could lead to economic stagnation if not managed carefully.

2. Constricted Labor Market

Another pivotal point is the nation’s shrinking labor force. Demographic shifts, stricter immigration policies, and the rapid adoption of artificial intelligence are converging to limit labor supply. This contraction has profound implications for various economic sectors, notably in productivity and consumer spending. While 2026 might witness slower job growth, the integration of AI could yield increased productivity and spur innovation in tech investments.

3. U.S. Debt Trajectory

The report also examines the implications of rising U.S. sovereign debt and persistent budget deficits on fiscal sustainability. This alarming trend poses questions regarding the safe borrowing capacity of the U.S. government, impacting interest rates and housing market dynamics. Nevertheless, emerging investment trends, such as stablecoin demand, may mitigate some of these fiscal pressures and reshuffle investment strategies.

Investment Strategies in Light of Changes

In light of these developments, Wilmington Trust emphasizes the importance of a disciplined and diversified portfolio strategy. With market valuations at historical highs and increasing volatility, investors must navigate these waters carefully. Here are some recommended strategies:

- Smart Manufacturing Investment

As automation and AI redefine manufacturing processes, investors can find new opportunities in sectors benefiting from these technological advancements. Industries related to cybersecurity and industrial automation are poised for growth, driven by increasing connectivity and capital needs.

- Leveraging Artificial Intelligence

AI presents a broad spectrum of investment opportunities, from foundational infrastructure to application-specific advancements. While sectors like cloud services and energy-efficient technologies may flourish, a balanced approach that also considers semiconductor markets is advisable for investors.

- Reassessing Debt Investments

The forecast suggests maintaining an affinity for U.S. debt, particularly investment-grade credit, while remaining cognizant of the tighter spreads that present lower margins for error. The inclusion of precious metals and cryptocurrencies may also serve as valuable portfolio diversifiers against currency fluctuations and economic instability.

Conclusion

Tony Roth, Wilmington Trust's Chief Investment Officer, encapsulates this sentiment by stating, "Periods of economic experimentation demand a thoughtful balance between opportunity and risk." Investors are encouraged to focus on adaptive strategies, diversification, and the quality of assets they select to weather the unfolding economic scenarios.

Investors can access the full Capital Markets Forecast report on Wilmington Trust's website for more insights into these game-changing economic shifts.

About Wilmington Trust

Founded with a vision to cultivate lasting relationships, Wilmington Trust specializes in wealth management and offers a suite of fiduciary and investment services designed for high-net-worth individuals and families. With a presence across the United States and in international markets, Wilmington Trust remains committed to navigating clients through changing economic landscapes effectively.