The financial advisory firm Diaphanum attributes the stock market's advance so far in 2026, mainly, to the good performance of corporate profits and the resilience that the United States economy continues to show.
According to the company, the latest earnings season in the United States (US) once again exceeded market expectations, as S&P 500 companies registered an increase in profits clearly above what was anticipated and, furthermore, many of them improved their projections for the rest of the year despite the uncertain context.
In parallel, the entity emphasizes that the labor market in the main world power continues to be "robust," household spending remains "relatively solid," and the business fabric maintains "a notable capacity for adaptation."
Likewise, Diaphanum highlights that the strong advance in profits in sectors linked to technology and semiconductors has consolidated the idea that this is a "structural and not cyclical" dynamic.
The brokerage firm adds that investors also take for granted that the current rise in prices will be "temporary." "The prevailing view is that a large part of the price tensions are linked to the energy conflict and that, once geopolitical uncertainties diminish, inflation will gradually return to levels more compatible with the central banks' objectives," the firm has specified.
Risks that could halt the rally
However, the organization identifies several risk factors that could put an end to the 'rally' in international markets. The first, recurrent in the current situation, is the duration of the conflict between Iran and the US, as any significant change in this region would directly impact energy prices and, by extension, global inflation.
The second major front is the increased uncertainty surrounding the trade war. In this area, the firm explains that, although relatively favorable agreements have been reached in recent months, a deterioration of the trade climate could hinder economic growth and increase the cost of living.
On the Asian front, the company's analysts also warn of a loss of momentum in China. In their opinion, the world's second-largest economy must advance in line with its official goals for global growth forecasts to be met.
"Although authorities have launched new stimuli, the real estate crisis continues to weigh on confidence and consumption.
The pace of economic activity continues to surprise on the downside and housing prices maintain their downward trend in both new construction and second-hand properties," experts have detailed.
Diaphanum also emphasizes the effect that high public and private debt on a global scale, growing differences between the US and Europe, and the valuations of certain stock market segments may have on markets.
In this regard, the firm considers that public deficits should "moderate" to prevent debt from continuing to increase in an "uncontrolled" manner. However, it warns that the most recent decisions by many governments are moving away from this objective and are fueling greater volatility in fixed income.
"High public and private debt worldwide represents a relevant risk if interest rates remain elevated for longer. Thus, the ability of governments and companies to refinance their liabilities will become an increasingly important variable for investors," the entity has stressed.
In relation to the valuations of some sectors, Diaphanum recalls that "although corporate profits have supported a good part of the recent increases, multiples are once again above their historical averages in numerous developed markets."
Consequently, "this reduces the margin for error in the face of any negative surprise. When valuations are demanding, any disappointment in profits, growth, or inflation tends to have a more pronounced impact on prices," the firm has concluded.