DataTrek 2H 2026 Investor Sentiment Survey Results

By datatrekresearch in Blog

In today's video we share the results of our DataTrek Mid-Year 2026 Investor Sentiment Survey. Our readers weighed in on their macro outlook (bullish), which asset class they like most for the back half (US stocks, by a wide margin), and their favorite Big Tech stock (it’s not Nvidia). On the biggest question of the year – whether and when AI-related CapEx will start creating shareholder value – they were resoundingly confident that these investments will pay off in the near (ish) future. Perhaps some of that optimism comes from the fact that most use more than one AI tool in their jobs.

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Transcript:

Hi, I’m Jessica Rabe, co-founder of DataTrek Research. Earlier this month we ran our DataTrek Mid-Year 2026 Investor Sentiment Survey, and the results tell a clear story: genuine optimism on the US economy, strong conviction on US large caps, but some notable anxiety about oil and inflation. In this video we'll dig into those issues as well as other topics, like which Big Tech stock investors like best for the second half of the year. 

Starting with some quick housekeeping items before we dive in. We had 471 total responses, 90 percent from the DataTrek Community and the rest from social media. There were fourteen multiple choice questions in the survey, with only a single answer allowed, possible responses were randomized where appropriate, and we only counted completed surveys. Thank you very much to everyone who participated!

Let's start with the big picture. Most of our respondents are optimistic about continued US economic growth. Seventy-six percent don't expect a recession in the next 12 months, 21 percent expect a modest contraction, and only 3 percent see a sharp slowdown. That's a bullish set of responses, though it's down slightly from our survey at year end 2025, when 83 percent said no recession. We think the US/Iran conflict and the resulting jump in energy prices are behind that modest pullback in confidence.

That macro view feeds straight into monetary policy expectations. On Fed Funds, 53 percent expect no change by year end, but 29 percent, the second most popular answer, see a 25 basis point hike, versus just 13 percent expecting a cut. Put another way, only about half the group think policy rates will be unchanged. With just over five months left in the year and a Fed that's gone notably quieter on its rate trajectory under Chair Warsh, investors are left with less clarity regarding US monetary policy.

Responses to our question about longer term interest rates follow the same narrative. Fifty-eight percent expect the 10-year Treasury yield, currently around 4.6 percent, to end the year around here or higher, and up from 4.2 percent at the start of 2026. That upward tilt lines up with the growth and policy rate views we just covered, namely a resilient economy paired with possibly higher short-term yields. It's also not the outcome Chair Warsh wants to see, and it could push the FOMC toward further hikes in 2027, since his inflation fight is supposed to bring long-term rates down, not take them higher.

One more macro data point to cover. Our question on the direction of the dollar produced the most even split of the entire survey: 26 percent expect a gain of 1 percent or more, 27 percent expect a decline of 1 percent or more, and 47 percent expect it to stay roughly stable. The DXY dollar index is up 2.8 percent year to date, and our survey takers see limited further movement either way over the next five months.

Now, none of this uncertainty around rates seems to be shaking respondents' confidence in US stocks. Fifty-four percent picked US large caps as their choice for the best performing asset class for the rest of the year, and domestic small cap votes add another 19 percent, so 73 percent of total responses favored domestic stocks. EAFE and Emerging Markets tied for third at just 7 percent each, even though EM is up 19 percent year to date on the back of a global semiconductor rally.

As for how much more US large caps have to run this year, sixty-two percent, the single most popular answer, expect the index to be up 5 to 10 percent over the rest of 2026, and 72 percent expect at least a 5 percent gain. At the midpoint of that range, that implies an S&P 500 around 8,060 by year end.

Zoom into sectors and the picture gets more interesting. Technology led at 49 percent of the vote, but Financials came in second at 19 percent and Health Care third at 11 percent, and collectively there was basically a 50/50 split between Tech and everything else. What's notable is that Financials and Health Care both trade cheap to the S&P on forward earnings, 15.5 times and 18.7 times versus 20.3 times for the index, and both have badly lagged this year, up just 2.2 and 3.4 percent versus 9.6 percent for the S&P. In other words, many of our respondents are not afraid to be contrarians.

Within Big Tech, Alphabet led the voting of which stock would perform the best, at 22 percent, with Nvidia second at 17, and Microsoft third at 16 percent. Alphabet also won our January survey at 38 percent, so our community has been consistent on this choice. The biggest mover since January in terms of marginal votes is Microsoft, up to 16 percent from just 7, likely valuation-driven given the stock is down 19.5 percent year to date and trades at 21.0 times forward earnings, very near the S&P 500. At the bottom of the list are SpaceX and Tesla, Elon Musk's two companies, at 3 and 2 percent.

Now here is the flip side to all the optimism. On oil, currently around $86 a barrel, 60 percent think prices finish the year at $70 a barrel or higher, and only 5 percent expect a retreat to the $57 level where oil started the year. Higher for longer was the consensus, even before the US/Iran ceasefire collapsed in the middle of our survey.

That view is clearly bleeding into inflation expectations. On core CPI, which was 2.6 percent as of June 2026, 44 percent see it landing in December 2026 between 2.5 and 2.9 percent and 42 percent see 3.0 to 3.3 percent. Only 4 percent think it drops below 2.5 percent. Elevated energy costs are keeping inflation expectations sticky, and that's the thread connecting oil, rates, and Fed policy uncertainty.

A few questions got at how respondents think about longer run risks and macro uncertainty. Eighty-two percent believe the S&P will post a total return loss of 10 percent or worse in at least one of the next 5 years. We see that as a healthy sign of longer-run investor caution, in that they're prepared to see the S&P down double digits over a year. For context, the actual calendar year math is more reassuring: since 1928, the S&P has had a calendar year loss of 10 percent or more in 12 of 98 years, a 12 percent annual probability, which works out to a 47 percent chance of at least one such year over a 5-year horizon.

On politics, 58 percent expect a split outcome from the midterms, with Democrats holding the House with Republicans holding the Senate. Twenty-one percent expect a full Democratic sweep. There's real uncertainty here, with only a slim majority opting for what is the consensus opinion.

And on the equity market's most central question right now, the time of any payoff around AI-related capex, respondents are surprisingly bullish. Only 10 percent think Big Tech's AI spending is value destroying, and another 17 percent call it a wash. That leaves 73 percent who believe it ultimately pays off, with the largest group, 39 percent, putting the payoff window at 3 to 5 years.

Now let’s move on to the last question we asked, which we included as essentially a benchmarking exercise for our clients. Fifty-eight percent of respondents said they use more than one AI tool daily in their professional life, 30 percent use just one, and only 4 percent say they don't and don't plan to. That's an 88 percent daily usage rate among our audience, and by almost 2 to 1, people are using multiple tools rather than just one. For the record, at DataTrek we use Claude, Gemini and ChatGPT.

With that, thanks again to everyone who took the survey, we really appreciate it. And thank you for watching this video, please hit like and subscribe if you enjoyed it. If you'd like to see our daily research, you can start a 2-week free trial on datatrekresearch.com. Thanks again for watching and we hope you have a great day!