Q1 2026 Market Outlook: Navigating Uncertainty

The Big Picture

As we enter Q1 2026, markets face a complex backdrop of moderating inflation, evolving Fed policy, and shifting global dynamics. Here’s
what we’re watching and how it may impact your portfolio.

Interest Rate Environment

The Federal Reserve’s path forward remains the dominant narrative. After a series of cuts in late 2025, the market is pricing in a pause as inflation metrics stabilize near the 2.5% level. We see this as broadly supportive
for equities, though the pace of any further easing may disappoint the most dovish expectations.

Key takeaway: Duration-sensitive assets remain attractive, but
we’d be selective in credit given tight spreads.

Sector Rotation Themes

Several rotational themes are emerging:

• Technology continues to benefit from AI infrastructure buildout, though valuations demand scrutiny
• Healthcare looks increasingly attractive on demographic tailwinds and reasonable multiples
• Financials should benefit from a steeper yield curve if the Fed pauses while long rates drift higher
• Energy faces headwinds from demand uncertainty but
  offers compelling free cash flow yields

Geopolitical Risks

Trade policy remains a wildcard. The latest round of tariff discussions has introduced volatility
in emerging market assets. We recommend maintaining diversified international exposure but with a quality bias.

What This Means for Your Portfolio

1. Stay
   invested — trying to time macro events is a losing game over time
2. Rebalance opportunistically — use volatility to bring allocations back to targets
3. Consider tax-loss harvesting — early-year positioning can set up beneficial swaps
4. Review fixed income duration — the rate environment favors intermediate-term bonds

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This commentary reflects MavenEdge’s current views and is for informational purposes only. It does not constitute
investment advice.