Three Factors Sustaining the Bull Market Through 2026: Fed Support, Trump Policies, and Dip-Buying

Bank of America's Michael Hartnett argues that the current bull market has legs well into 2026, fueled by a trifecta of supportive factors. The Federal Reserve's accommodative stance, fiscal tailwinds from the TRUMP administration, and relentless dip-buying are creating what he describes as a 'bubble in expectations' rather than a traditional asset bubble.

Tech stocks may be stumbling, but Hartnett cautions against premature exits. The strategist highlights unconventional market backstops—including national security justifications for government intervention and anticipated quantitative easing—as underappreciated catalysts. Tax cuts and tariff dividends further grease the wheels of this liquidity machine.

While AI dominates headlines, Hartnett's analysis underscores how monetary policy and fiscal stimulus remain the invisible hands shaping market trajectories. The note observes that easing financial conditions historically act as jet fuel for equities, with credit spreads and bank stocks serving as critical canaries in the coal mine for any risk-off shift.