Let's get political

We don’t own a crystal ball (if we did, we would have bought silver last January). But we do own a calendar, and for investors prepping for the year ahead, that should be enough.

Geopolitics are set to dominate headlines and move markets in 2026, with the US striking Venezuela, President Trump making threats about Greenland, and the war between Ukraine and Russia continuing.

But the most serious disruption may be taking place right here at home. Take a look at a few of the potential political highlights of the coming year, and how they might throw your portfolio out of whack if you’re unprepared:

• The US Supreme Court could issue a ruling on Trump’s tariffs as soon as Friday. Justices seemed to seriously question the president’s use of the International Emergency Economic Powers Act to enact Liberation Day tariffs when they heard oral arguments in November, and while the government has some alternative options if the court rules against it, such a ruling would seriously undermine the president’s power and potentially force billions of dollars in refunds.
• The longest government shutdown in history seemingly just ended, but we’re already staring down the barrel of yet another one. Congress convened this week to begin debating a funding bill before the deadline on January 30, and while another shutdown likely wouldn’t be as expensive as the last, it will still still disrupt the livelihood of tens of thousands of Americans.
• Jerome Powell’s latest term as Federal Reserve chair ends on May 15, and it’s pretty clear Trump will replace him ASAP. The question is who will take the throne (frontrunners include Kevin Hassett, Kevin Warsh, and Christopher Waller), and how the market will react to the new head honcho.
• Trump signed a free trade agreement with Mexico and Canada during his first term in office, but that deal is up for review in July. Given Trump’s noted dislike of free trade in general, and ongoing trade tensions with these two countries in particular, investors should brace themselves for the sort of economic disruption they haven’t seen since Liberation Day.
• Don’t forget that we’ve got midterm elections in November. This may be the most important point for investors: Midterm years aren’t usually good ones for the S&P 500, but the months that follow Election day are historically fantastic.

The US is celebrating its 250th birthday this year, and considering the calendar above, it’s going to be one doozy of an anniversary.—MR