The Case for U.S. Stocks Over the Next 90 Days

While watching the price action in crude oil, gold and stocks early in the session on Sunday, I had no idea that I’d be building a bullish case for U.S. stocks over the next 90 days less than 24 hours after the headlines were dominated by war in the Middle East. Turning back the calendar further, I even reconsidered my bearish outlook on the unsettled AI landscape as well as the ongoing debate about Federal Reserve policy. But here we are and we have history, earnings and long-term policy to give us reasons to remain bullish.

Jaime Martinez Medina, Global Market Strategist at PU Prime commented:

Despite heightened geopolitical tensions and periodic volatility across commodities and global markets, the medium-term outlook for U.S. equities remains constructive. Short-term reactions to geopolitical events often create sharp market swings, but history shows that equity markets tend to recover relatively quickly once uncertainty begins to fade.

Data from several market studies suggest that the S&P 500 typically stabilizes within weeks after geopolitical shocks, as investors shift focus back to economic fundamentals. The recent resilience of U.S. equities despite negative headlines reflects this broader pattern. Markets are increasingly driven not by single events, but by expectations around growth, earnings, and policy support.

Monetary policy remains one of the most important tailwinds. The Federal Reserve has already delivered multiple rate cuts over the past year, and markets still expect further easing ahead. Meanwhile, the decline in U.S. Treasury yields signals that financial conditions are gradually becoming more accommodative. Historically, equity bear markets tend to emerge when policy becomes restrictive, not when the central bank is easing.

Corporate earnings continue to reinforce the bullish case. Recent results indicate that many companies are maintaining strong margins and demonstrating resilience despite tariff pressures and elevated energy costs. Earnings growth remains the primary long-term driver of equity prices, and current forecasts still point toward healthy expansion across several sectors.

Structural themes also support the market outlook. Investment tied to artificial intelligence and digital infrastructure continues to accelerate, sustaining capital expenditure across the technology ecosystem. At the same time, market leadership is beginning to broaden beyond a small group of mega-cap technology companies, with increasing participation from industrial, financial, and mid-cap stocks.

Seasonal patterns add another supportive factor. Historically strong performance in the March–April period, combined with relatively cautious investor sentiment, creates conditions that often precede upward momentum.

Taken together, earnings strength, accommodative policy, structural growth themes, and improving market breadth suggest that U.S. equities could remain supported over the coming quarter, even if volatility persists along the way.

I’ve Seen This Movie Before

My experience in the markets has given me confidence in the long run because I’ve seen the impact and recovery from the 1987 crash, the 9/11 shutdown, the housing and credit crisis that halved the indices over a two year period, the internet bubble burst and the COVID dump. I can understand all the reasons why investors sold. Short-term panic is one of them. Overreaction is another.

The impressive turnaround in the stock market on Monday represents a small trading window, I get that, and it doesn’t mean the stock market won’t finish the week lower or even the month. But looking beyond the price action, I see resilience in the face of very negative events.

I can see clearly that the market’s performance is not based on one trade or one event, but on a collective long-term outlook for the future value of stocks.

History Says Stay Invested After Geopolitical Events

While I am speaking from personal experience, Barclays trading desk data going back to 1980 just two years before this current bull market began shows the S&P 500 averages essentially no change the day after a geopolitical event, and additional studies show stocks recover within one month after the start of a conflict. What this proves is that long-term investors took the heat, stayed the course and were rewarded. I am taking the U.S.-Iran situation seriously, don’t get me wrong, but it fits a well-documented historical pattern that many of us have seen: the sharp short-term fear, followed by recovery as clarity emerges.

The Fed Is Still Your Best Friend

And while history supports my long-term outlook, I also have seen the role the Federal Reserve plays during these types of markets. Right now, although it hasn’t been very active yet in 2026, the Fed remains firmly in easing mode, one of the most reliable tailwinds for equities in any cycle. The Fed cut rates 75 basis points in 2025, and investors expect another 50 basis points of cuts in 2026. We could even see the first one this year as early as June.

Additionally, just last week, the 10-year Treasury yield fell below 4%. This sends a signal from bond market traders, the best in the world in my opinion, that the market is pricing in more accommodative conditions ahead. History shows us that bear markets usually begin when conditions are more restrictive, not accommodative. Furthermore, the Fed is the best safety net to have when it’s dovish. I’ve seen it provide protection when the stock market weakens too much and it tends to drive yields lower, making them a less attractive alternative to stocks. What this means is that the return on stocks is likely to continue outperforming the return on bonds.

Earnings Are the Engine and They’re Still Running Strong

Expectations of exceptional earnings growth are another reason why I see continued strength in the stock market. Earnings are the single most important long-term driver of stock prices. The recent earnings season showed us that corporate revenues continue to beat expectations, operating leverage is expanding, and companies have demonstrated strong cost discipline. Just look at how the most successful companies have navigated the uncertainty of the tariffs, and after a period of adjustment, they probably do the same with elevated energy prices.

Fiscal Policy, Monetary Policy and Deregulation All Pointing the Same Way

Trump’s One Big Beautiful Bill Act has been called inflationary, but while inflation remains at uncomfortable levels, we haven’t seen the runaway variety that can cripple an economy. Looking forward, this bill will deliver $129 billion in corporate tax relief through 2026 and 2027. This will directly support earnings and cash flows. Tax relief is expected to boost household spending power at the same time deregulation is seen unlocking lending capacity in the financial sector. I expect to see more growth this year simply because fiscal policy, monetary policy and deregulation will all be working together.

The AI Supercycle Is Intact

Currently, the stock market is experiencing some panic around AI disruption, but Wall Street’s consensus remains bullish. In my opinion, we’re seeing what J.P. Morgan calls an AI supercycle. That’s the defining theme that is likely to keep this bull market intact. What we’re not seeing as we have in the past is investor euphoria, but contrary thinking has me convinced that this could actually be a bullish sign. Just think about it, investors dumping stocks because the companies are not making money fast enough.

Edward Jones analysts argue that the fear of AI agents taking over software may be overblown. Sure, we can see that the performance gap between semiconductors and software has become extreme, but it may have been pulled too far so that we can expect a snapback over the next 90 days. Additionally, Anthropic’s recent product announcements are designed to complement existing systems, not replace them. A rebound in the software sector over the next 60-90 days would broaden the rally and provide another market tailwind in my opinion.

The Bull Market Is Broadening

One thing that I’m seeing in 2026 is the broadening of the bull market. Last month, while technology stocks were selling off, money wasn’t leaving the market, it was being redeployed into blue chip “old economy” stocks, driving the Dow to over 50,000 for the first time. Money has also been spread to small and mid-cap companies showing that the overall market performance doesn’t have to rely on a narrow concentration in Magnificent 7 stocks. This broadening should help create a healthier, more durable bull market, not a topping pattern.

Figure 1. Monthly Dow Jones Industrial Average (DJI). Source: TradingView.

Seasonality, Sentiment and a Coiled Spring Setup

Another thing that matters is that the stock market is now entering the historically bullish March and April time period. The benchmark S&P 500 Index is also trading in one of its narrowest ranges on record, some call it a coiled spring setup that historically precedes a directional move higher. There is also evidence of potentially strong equity returns coming from the University of Michigan’s consumer sentiment indicator. Currently, it sits at a level worse than it was during the depths of the Great Financial Crisis. What better contrary indicator is there?

Figure 2. Monthly S&P 500 Index (SPX). Source: TradingView.

Bottom Line: The Weight of Evidence Points Higher

Finally, the bullish case for U.S. equities over the next 90 days does not rest on a single argument. It rests on several independent ones. Geopolitical history says stay invested. The Fed rate cuts, strong earnings and fiscal stimulus are all bullish factors to consider.

AI capital spending is accelerating and showing no signs of letting up. We also have favorable seasonality and a broadening bull market. And investor sentiment isn’t euphoric enough to suggest we’re in bubble territory.

None of this means we’ll be looking at a straight line bull market. Oil prices could remain elevated at uncomfortable levels, the geopolitical situation could escalate and the Fed could make a few missteps. All of this could inject volatility into the markets, but we have to stay the course and look past the noise because the weight of evidence shows that earnings, policy, history and sentiment all point higher.