2026 Outlook

As we enter 2026, the global investment environment is shaped by a complex interplay of issues. The aftermath of 2025’s market volatility, driven by geopolitical tensions and erratic policy shifts, has given way to a year of transition. While recession risks remain, J.P. Morgan forecasts a 35% probability of a U.S. and global recession. A consensus is forming around a potential soft landing, with global gross domestic product (GDP) growth projected at 2.8%.

Key themes for 2026 include the continued integration of artificial intelligence (AI), a renewed focus on the defence and aerospace industry, the ongoing energy transition, and a potential resurgence in the healthcare and financial services sector.

This article explores key industries and sectors to watch in 2026, highlighting potential trends, drivers, and risks that will shape the year ahead.

Key sectors and industries to watch in the United States

1. Aerospace & Defence

The U.S. military budget is experiencing significant increases. President Trump’s proposed 2027 U.S. military budget is $1.5 trillion and has generated market interest, with defence stocks surging in early January. For 2026, weapons spending is expected to increase by 22% year-over-year (YoY), with $113 billion allocated to procurement and research, development, testing, and evaluation accounts.

Global market size

According to industry forecasts, the global defence market is projected to reach $4.26 trillion by 2035, growing at a 5% compound annual growth rate (CAGR) from 2026.

AI integration in defence

The U.S. Department of Defense (DoD) is accelerating AI uptake. U.S. aerospace and defence spending on AI and generative AI is expected to reach $5.8 billion by 2029, representing a 3.5x increase from 2025 levels. The DoD has awarded contracts to four leading U.S. AI companies to accelerate intake across critical mission areas, with applications in autonomous mission planning, real-time collision avoidance, and geospatial targeting.

2. Artificial Intelligence & Data Centres

The AI momentum continues to be a dominant theme, with the focus in 2026 on tangible infrastructure build-outs. The demand for computing power to train and run AI models is driving a massive wave of investment in data centres and the underlying hardware.

Data centre investment

Global AI data centre capital expense is expected to reach $400 - $450 billion in 2026, with over half of that spending in the U.S. The overall data centre market is projected to grow by 14% in 2026.

Semiconductor demand

The share of semiconductors used in data centres is expected to grow from 20% of the market currently to 50% by 2030.

Blockchain infrastructure

Layer 2 scaling solutions now process 63% of Ethereum transactions. Bitcoin mining generated $21.6 billion in revenue in 2025.

3. Healthcare Services

After a period of underperformance, the healthcare sector is attracting renewed investor interest. The sector offers a combination of defensive characteristics and long-term growth potential, driven by demographic trends and technological innovation.

Mergers and acquisitions activity

According to CNBC’s reporting on the pharmaceutical industry, a $170 billion patent cliff is forcing major pharmaceutical companies to acquire biotech assets to replenish their pipelines. This dynamic is expected to drive significant M&A activity in 2026.

Digital transformation

According to life sciences industry surveys, 48% of executives cite digital transformation as a key trend for 2026. Additionally, 41% identify generative AI as an influential trend, and 30% cite agentic AI (autonomous AI systems) as a trend.

4. Financial Services

The financial services sector is positioned for significant activity in 2026, with market participants noting the potential for bank stock performances. The industry is benefitting from a combination of lower interest rates, earnings dynamics, and M&As.

Interest rate environment

The Federal Reserve cut rates to a range of 3.50% - 3.75% in late 2025, with further cuts expected in 2026.

Earnings growth

The financial sector is expected to see earnings growth of 13% in 2026, supported by stronger operating leverage and reduced tariff challenges.

Fintech innovation

AI and fintech innovations are transforming the industry. AI agents are being deployed for compliance and risk management, and hyper-personalisation is becoming more prevalent in consumer finance.

5. Renewable Energy

The transition to renewable energy remains a long-term trend, driven by decarbonisation mandates, energy security concerns, and the increasing cost competitiveness of clean energy technologies. Global investment in clean energy reached $2.2 trillion in 2025, out of a $3.3 trillion total energy investment.

Energy storage

The integration of intermittent renewable energy sources is driving demand for energy storage solutions to ensure grid stability.

South African Market Outlook

For South Africa, the key themes in 2026 will play out against unique economic challenges. The JSE is still a two-sided market, with the performance of large, multinational corporations often diverging from that of domestically focused companies.

The establishment of the Government of National Unity (GNU) has been viewed positively by markets. According to Investing.com’s bond yield data, the 10-year government bond yield spread between South Africa and the U.S. has narrowed to levels last seen in 2013. This narrowing of the spread has implications for local bank valuations, which are sensitive to sovereign risk and funding costs.

Since load shedding has eased considerably, the primary infrastructure bottlenecks for 2026 have shifted. According to JP Landman’s analysis of South Africa’s water crisis, the country faces a projected 17% water shortfall by 2030 without major interventions. According to Moneyweb’s reporting on Transnet, the persistent logistics crisis at Transnet continues to constrain the mining sector and other export-oriented industries.

Key sectors to watch in South Africa

1. Mining & Resources

As a major producer of platinum group metals (PGMs) and gold, South Africa is positioned to participate in global commodity trends. However, the sector’s ability to capitalise on commodity strength is dependent on resolving logistics and infrastructure constraints.

Platinum market dynamics

Bank of America Securities forecasts a 2026 platinum price of $2 450/oz, a noticeable increase from their previous forecast of $1 825/oz.

●       Supply deficit: The platinum market is expected to remain in a deficit, averaging 727 000 ounces annually from 2025 to 2029. This represents 9% of the average supply.

●       Production challenges: South African platinum production contracted by approximately 5% YoY from January to October 2025 due to operational issues such as flooding and plant maintenance. While a potential recovery is expected in 2026, it is not anticipated to be enough to ease the supply deficit.

2. Financials

With the South African Reserve Bank (SARB) likely to follow global trends in interest rate policy, local banks are in focus.

The SARB’s repo rate stands at 6.75% as of January 2026. Economists forecast rate cuts throughout 2026. Investec anticipates cuts in March and September, lowering the repo rate to 6.25%. Bloomberg Economics forecasts a decline to 6.50% by year-end.

This year is shaping up to be one of transition, where market participants will need to manage a complex environment. The dominant themes covered represent areas of increased economic activity. However, investors should be mindful of the risks, including geopolitical uncertainty, regulatory changes, and the potential for economic slowdown.

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** This article was prepared by BROKSTOCK analyst Maboko Seabi