Global markets enter 2026 in a fundamentally different position than where 2025 closed. After delivering a robust 19.35% total return, a year dominated by artificial intelligence enthusiasm, unprecedented mega-cap concentration, and surprising economic resilience amid political dysfunction, investors now face a critical inflection point. Wall Street's major institutions have moved decisively bullish, with S&P 500 targets ranging from 7,100 to 8,000 by year-end. Yet beneath this consensus optimism lies a more complex reality: narrowing labor markets, persistent inflation that refuses to cooperate with Federal Reserve assumptions, and a K-shaped economy where affluent consumers drive returns while middle and lower-income households remain constrained.