Bloomberg Surveillance · Wednesday, September 9, 2026
While U.S. equity markets have hit all-time highs driven by strong corporate earnings, Seema Shah of Principal Asset Management predicts a slowdown in the pace of growth for the remainder of 2026. She notes that Q2 earnings were exceptionally strong, but the second derivative of growth is likely to show a slight deceleration. Despite this, Shah believes the market backdrop remains strong and a slowdown in earnings growth doesn't necessarily imply a pullback for equities.
“I think you're absolutely right in that the major theme which has been driving markets this year, you know, there's been geopolitics, there's been tariffs, there's been so much going on. And actually, what's driving markets continues to be earnings growth, which makes sense given the tremendous performance to this point. With Q2 being incredibly strong.”
“Now, from here, you know, the math starts to come in and that is very unlikely that you're going to see this continued pick up in pace when you're already at these 50 percent or so levels. So we think it's still strong growth ahead. But the pace, you know, that second derivative starts to show through and you get a slight slowdown.”
“But to our minds, I think for the rest of the year, there's a number of challenges and you've got earnings growth starting to slow a bit. And to us, that means slightly more modest gains ahead for the remainder of 26.”