2026's 'Hat Full of Surprises:' AI Valuations & Small Caps See Tests Ahead

"A hat full of surprises" is how Tony Welch classifies the first half of 2026, noting market resiliency in the face of geopolitical uncertainty. That said, he sees valuations "relatively high" in the AI space and doesn't see much more room to run for related stocks. Tony urges investors to brace for an AI rotation and points to other sectors he sees benefiting from the movement. The vast outperformance in small caps is something he expects to continue due to the U.S. economic outlook. ======== Schwab Network ========Empowering every investor and trader, every market day.Subscribe to the Market Minute newsletter - https://schwabnetwork.com/subscribeDownload the iOS app - https://apps.apple.com/us/app/schwab-network/id1460719185Download the Amazon Fire Tv App - https://www.amazon.com/TD-Ameritrade-Network/dp/B07KRD76C7Watch on Sling - https://watch.sling.com/1/asset/191928615bd8d47686f94682aefaa007/watchWatch on Vizio - https://www.vizio.com/en/watchfreeplus-exploreWatch on DistroTV - https://www.distro.tv/live/schwab-network/Follow us on X – https://twitter.com/schwabnetworkFollow us on Facebook – https://www.facebook.com/schwabnetworkFollow us on LinkedIn - https://www.linkedin.com/company/schwab-network/About Schwab Network - https://schwabnetwork.com/about