IEQ Capital sees higher rates driving volatility without derailing bull market
SPY•IEQ Capital’s fourth-quarter 2026 outlook sees low near-term recession risk and says higher rates may drive volatility without reversing the bull market. It cites estimates that AI-related capital expenditures could exceed $5 trillion through 2030 and that hyperscalers and AI infrastructure companies account for about 75% of S&P 500 earnings growth in 2026.
1. Outlook and diversification
IEQ Capital’s fourth-quarter 2026 outlook sees low near-term recession risk, with higher interest rates driving volatility rather than reversing the bull market. Industry estimates cited in the outlook put AI-related capital expenditures above $5 trillion through 2030, while cited research estimates assign about 75% of 2026 S&P 500 earnings growth to hyperscalers and AI infrastructure companies. The outlook names fixed income, buyout private equity, secondaries and real estate as potential diversification from AI concentration risk, and says higher financing costs increase the importance of private-market manager selection as technology and software borrowers show emerging vulnerabilities.
