Here are the new bulls on the block for 2026

Bank of America’s Flow Show research argues materials should be a core 2026 theme alongside commodities, emerging markets and small-caps, driven by an $800bn AI capex cycle, U.S. housing shortages, rising defense spending and a geopolitical grab for natural resources. BofA notes the materials sector now makes up just ~2% of the S&P 500, near three-decade lows, and highlights a surge in the steel ETF (SLX) approaching highs not seen since 2008. The team views a strengthening Chinese renminbi as supportive for materials imports. The piece is constructive for cyclical commodity and materials exposure and signals potential sector re-rating if macro growth persists.