Wall Street's Bull Market May Be Running Out of Steam—Capital Economics Flags 2027 as Critical Year

Capital Economics is sounding the alarm on a potential sea change in the U.S. stock market landscape. According to the research firm's chief market economist, mounting evidence suggests the current bull market could be entering its final chapter, with 2027 emerging as a pivotal turning point.

The key signal lies in a dramatic rotation sweeping across equities. Small-cap, value, and defensive stocks are increasingly outpacing their large-cap, growth-focused counterparts—a pattern that carries uncanny parallels to the late stages of the dot-com bubble. This divergence in performance isn't random; it often signals an exhausted bull market searching for stability before a broader reversal.

What makes this analysis particularly noteworthy is the timeframe. We're now less than a year away from 2027, the window Capital Economics identifies for potential market inflection. The rotation intensity suggests this isn't just a temporary shift in investor sentiment—it may be an early warning of structural changes ahead in how markets price risk and opportunity.

For market participants, the takeaway is clear: the current bull market's reign appears limited, and the indicators we're seeing today could reshape portfolio strategy and asset allocation decisions in the months ahead.