Raymond James analysts predict that public policy will frequently shape financial markets in 2026, continuing many themes from 2025 but with distinct nuances influenced by geopolitical and regulatory environments. The U.S.-China relationship is expected to focus on avoiding friction while building mutual insulation, with key meetings between Donald Trump and Xi Jinping anticipated to stabilize tensions. The Trump administration is poised to treat artificial intelligence as a strategic asset, with spending on data centers and AI models surging.

The government is set to launch an AI innovation platform using federal datasets, favoring companies that can offer full-stack solutions. This push is expected to benefit hyperscalers in the AI sector. On mergers and acquisitions, Raymond James expects a more accommodative approach from regulators compared to the Biden era.

With reduced economic uncertainty, especially around U.S. tariffs, the market is ripe for further deals. However, some transactions may still face hurdles due to past political statements. Bank mergers, in particular, are expected to thrive in 2026, following a notable increase in 2025.