U.S. tariff rates, global trade relationships and growing opportunities in artificial intelligence are among the key factors impacting institutional investors in 2026, according to a new report by WTW.

It found in 2025, the U.S. effective tariff rate rose dramatically, from 2.3 per cent in January to 13.5 per cent by the end of the year, a level not seen since early in the 20th century. As a result, U.S. tariff policy is expected to continue to drive a significant realignment in global trade relationships, said the report.

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In addition, the investment expenditure of AI companies continues to grow rapidly. Capital expenditure by the top six U.S. cloud companies alone is expected to be more than US$1.3 trillion over the next two years, with a more than 40 per cent increase in 2026 compared to 2025.

Despite geopolitical volatility, the report noted cyclical growth will likely continue to be strong in 2026, particularly in the U.S., which looks set to grow meaningfully above trend and current consensus expectations.

Positive economic growth is also expected across many major countries. In the U.S., gross domestic product is anticipated to grow 2.5 per cent this year, with AI and fiscal spending boosts as the major drivers. In Canada, the economy is expected to rebound as fiscal and monetary policy impacts flow through amid cooling inflation, while in China, tighter governance is expected to produce nearly five per cent GDP growth.

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