With investors eyeing a new year of earnings and policy shifts, Regions Bank chief investment officer Alan McKnight offered a clear focus: tech’s long run and the next moves for other sectors. Appearing on The Claman Countdown, McKnight addressed how portfolio leaders are sizing up 2026 and the strategies that may follow from a long stretch of tech leadership.
The conversation comes as money managers reassess risks after years of gains tied to artificial intelligence and mega-cap platforms. The questions now involve what holds up if growth slows, when rate policy changes, and how leadership could transition across the market.
“Regions chief investment officer Alan McKnight analyzes the 2026 market, tech’s long run and what could come next for other sectors on ‘The Claman Countdown.’”
Why the 2026 Outlook Matters
Market views for 2026 are forming amid crosswinds. Investors are balancing strong balance sheets at major firms with concerns about profit margins, wage pressures, and borrowing costs. The path of interest rates will shape credit markets, housing, and valuations across equities.
Portfolio positioning often shifts when the rate cycle turns. If borrowing costs ease, capital-heavy industries can see relief. If rates stay higher for longer, cash flows and steady dividends can draw more demand. Either way, managers are testing scenarios instead of relying on a single outcome.
Tech’s Long Run and Concentration Risks
Technology has driven a large share of stock gains in recent years, led by cloud computing, semiconductors, and AI infrastructure. Many investors view that trend as durable given enterprise spending and ongoing productivity efforts. The debate centers on whether earnings growth can keep pace with high valuations.
Risk managers also watch concentration. When a small group of names accounts for a heavy slice of index returns, portfolios can become exposed to a narrow set of assumptions. A strong pipeline of AI-related demand supports the bull case. But any slowdown in capital spending, chip cycles, or regulatory pressures could shake sentiment.
What Could Come Next for Other Sectors
Rotation is a recurring market theme. If leadership broadens, several parts of the market could benefit. Industrial firms tied to automation and logistics upgrades may find tailwinds if companies seek efficiency gains. Energy businesses can react to commodity trends and supply decisions. Healthcare often draws interest when investors seek steady demand and cash flows. Financial firms respond to credit costs, loan growth, and yield curves.
Small and mid-cap names may also gain attention if financing conditions improve. These companies can be more sensitive to rates yet nimble when growth picks up. Still, a slower economy can weigh on their margins and access to capital, making selection key.
Investor Playbook: Questions to Ask
- Are portfolio earnings tied to a few themes or spread across sectors?
- How sensitive are holdings to rates, wage costs, and pricing power?
- Do balance sheets support investment needs and dividends?
- What assumptions drive AI-related revenue and capex plans?
Diversification remains a core tool. Asset allocators often blend growth leaders with cyclicals and defensives to reduce single-theme risk. They also stress-test for different inflation and rate paths to check how cash flows stack up under pressure.
Signals to Watch
Key indicators can offer early reads. Corporate guidance will set the tone for capital spending and hiring. Purchasing manager surveys and freight volumes hint at business activity. Credit spreads help reveal stress in weaker balance sheets. Semiconductor order trends speak to the depth of AI and device demand.
Policy also looms. Central bank decisions affect mortgage rates, consumer credit, and equity multiples. Trade and antitrust actions can alter margins, especially in tech and healthcare. Energy prices feed into costs for transport and manufacturing, shaping profit outlooks.
A Balanced View Emerges
McKnight’s focus on tech’s endurance and sector follow-through reflects how professionals are approaching 2026. Tech’s earnings engine remains central, but portfolios also need room for shifts in leadership. The best setup may come from pairing durable innovators with businesses that benefit if financing costs ease and enterprise spending broadens.
As earnings season unfolds, investors will look for confirmation that growth is expanding outside a small set of names. If that happens, market breadth could improve and reduce concentration risk. If not, the case for staying anchored to proven cash generators will likely hold.
Bottom line: watch the rate path, corporate guidance, and signals from capital spending. Those cues will shape whether tech keeps leading or shares the stage with industrials, healthcare, financials, and select smaller firms. The next few quarters should tell investors how to position for what comes after a long run at the top.
