Here’s What Could Power the Markets Higher in 2026

Washington is preparing a spending push big enough to move entire industries. The One Big, Beautiful Bill Act plans to channel $4.1T through 2034 — potentially climbing to $5.5T — and could create major tailwinds for sectors like domestic manufacturing and defense if temporary provisions stay in place. The plan restores and expands capital-expenditure incentives to supercharge production by cutting investment costs and boosting cash flow for companies upgrading equipment and facilities.

• SocGen highlights stocks across five sectors set to benefit from OBBBA, ranging from manufacturers like CaterpillarCAT
  , NucorNUE
  , and DeereDE
  to defense names like Northrop GrummanNOC
  , tapping into ~$150B in front-loaded military spending.
• Energy producers like Exxon MobilXOM
  and ConocoPhillipsCOP
  stand to gain as oil and gas leasing restarts, while community banks like KeyCorpKEY
  could see stronger loan demand from targeted tax relief.

Follow the budget deficit: SocGen’s Manish Kabra believes this represents one of the largest spending packages in recent history, positioning multiple sectors to benefit as the fiscal stimulus filters through the economy. That will send annual fiscal deficits over $600B after 2025, before easing below $400B after 2030. While that sounds bad for the budget, historically, profit margins have shown a strong positive correlation with fiscal deficits — higher deficits tend to precede fatter margins by roughly one year.