- Monetary easing and fiscal stimulus to strengthen economic growth in Canada and the U.S.
- AI investment and development projected to drive innovation, productivity across economies
- Continued wealth effect to fuel markets and household spending
According to IG Wealth Management’s (“IG”) 2026 Market Outlook (the “Outlook”), Canadian investors that continue to exercise discipline and patience amid market uncertainty, while prioritizing fundamental-driven investment management, will find themselves on the right path in 2026.
“Investors can expect the global economy to continue on a positive trajectory in 2026 as we move past the rolling recessionary environment of 2023 and tariff uncertainty over the last year,” said Philip Petursson, Chief Investment Strategist, IG Wealth Management. “Recession risk remains low into 2026, while our macro indicators related to financial conditions support a constructive outlook for the year ahead. The markets have largely stabilized following volatility from early 2025, and investors that stayed the course should feel confident about the durability of the current market cycle.”
In its Outlook, IG’s Investment Strategy Team believes the following themes will support the broader economy, alongside equity and fixed income markets in 2026:
Monetary Easing and Fiscal Stimulus to Drive Economic Growth
Rate cuts are expected to continue across central banks, including the Bank of Canada and the U.S. Federal Reserve. Central Banks will continue to shift away from restrictive policies to easing, encouraging economic growth in both countries to support corporate investment, the housing market and consumer spending. Further, governments are boosting their spending, with Canada focusing on strengthening housing, productivity and infrastructure, while the U.S. preserves lower personal and corporate tax rates to encourage spending. Across the two countries, economic policies are aligned to support the current constructive economic cycle.
Opportunities Stemming from the AI Revolution
Throughout 2025, artificial intelligence (AI) dominated conversations across sectors. The ongoing emergence of AI has not only resulted in increased productivity and economic growth, but has also driven significant investment in infrastructure, capital expenditures and research and development as companies fully leverage AI capabilities. As these investments begin to translate into further productivity gains, AI has the potential to extend the current constructive economic cycle and support broader economic growth.
Significant Impact Coming from the Wealth Effect Wave
Over the last three years, and especially in 2025, the Outlook notes that investors saw substantial gains from equities, complemented by stability in fixed income. As seen in the 2009 market rebound, when equity markets rise, so do household wealth and consumer spending, creating a so-called “wealth effect”. This cycle is likely to be repeated in households across Canada and the U.S., demonstrating market behaviour consistent with economic resilience and expansion.
“If 2025 was a year of uncertainty, 2026 will bring clarity–not through the absence of noise, but through the strength of fundamentals. Supported by monetary easing, fiscal expansion, AI-driven investment and increased household wealth, investors have reason to be bullish if they embrace the current market cycle as it unfolds. The opportunity lies not in timing the market, but in understanding it,” concluded Mr. Petursson.
Read the full IG Wealth Management 2026 Market Outlook on the IG website: https://www.ig.ca/en/insights/2026-market-outlook
About IG Wealth Management
Founded in 1926, IG Wealth Management (“IG”) is a Canadian leader in delivering financial planning with approximately $158 billion in assets under advisement as of October 31, 2025. For more than 95 years, IG has been focused on improving the financial well-being of Canadians so they can confidently embrace all of life’s possibilities. Through a network of advisors located across the country, IG provides approximately one million clients with personalized advice, comprehensive financial planning, insurance and mortgage services and professionally managed investment solutions. IG is a member of IGM Financial Inc. (TSX: IGM), part of the Power Corporation group of companies and one of Canada’s leading diversified wealth and asset management organizations with approximately $307 billion in total assets under management and advisement as of October 31, 2025. For more information, visit ig.ca
Source: IG Wealth Management
