4Q 2026 Equity Market Outlook Final for Posting 10 12 26

Equity Outlook 4Q 2026 Rising Rates Shift the Balance of Risks Underlying economic drivers remain healthy, but rising yields, potential earnings pressure and overall market fragility may warrant further caution.

AMR HANAFY, CFA Research Analyst

Bottom Line We believe a combination of higher yields, potential earnings growth pressure and overall market fragility has shifted the balance of risks. While we remain constructive on global equities, more caution appears warranted.

This Is Not a Bearish Call… We believe underlying economic drivers remain strong, the U.S. labor market is holding firm, and that derailing the global manufacturing upcycle would be hard without far more aggressive interest rate hikes than we expect. We also continue to believe in AI’s potential to drive near-term economic growth and long-term productivity gains across the wider economy.

…Yet Risk Has Mounted What has changed, in our view, is how much could disappoint from here as interest rates continue to rise and geopolitical tensions remain unresolved. History suggests that strong nominal growth, resilient market performance and higher yields can coexist—until something breaks. We worry higher discount rates and rising bond volatility could put pressure on equity valuations and reduce liquidity, alongside further geopolitical strife, potentially slowing AI capex and weaker consumer demand.

Portfolio Recommendations at a Glance • Risk Posture: More cautious (though not bearish) as the balance of risks continues to shift • Regions: Reduce global equities and EM to neutral; prefer U.S. large cap, Japan and China; underweight Europe • Styles and Sizes: Trim small and mid caps to neutral; remain neutral on value vs. growth • U.S. Sectors: Maintain barbell of quality Technology and Cyclicals, with Health Care as an AI hedge

This material is intended as a broad overview of the Research team’s style, philosophy and process and is subject to change without notice. The views expressed may differ from those of other Portfolio Managers as well as the views of Neuberger. See Disclosures at the end of this presentation. The sectors or markets mentioned are for illustrative purposes only. Nothing herein constitutes investment advice or a recommendation to buy, sell or hold a security. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable.

Equity Outlook | 4Q 2026 For Professional Investors Only | 2