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In 2025, we observed a market environment where fiscal and monetary policy decisions, rather than traditional business fundamentals, were the primary drivers of market direction. This shift means that policy influence and market momentum have become significantly more impactful in shaping market trends, often overshadowing underlying economic performance. This policy and momentum-driven market is expected to continue, bringing with it continued volatility and significant price fluctuations. Investors should prepare for these swings by remaining patient and avoiding impulsive reactions to short-term sentiment. The good news is that LPL Research believes policy could be a tailwind for markets. We believe monetary decision-makers will continue easing policy as economic conditions downshift and inflation remains contained. Corporate earnings may help, though there will be little room for error. Core bonds will quietly offer some value, which should be aided by a more dovish Federal Reserve. In this policy and momentum driven market, we strongly encourage investors to look at non-correlated alternative investments. To learn more about the opportunities and challenges to be on the lookout for, read the 2026 Outlook today.