A snapshot of 2025 –
Revisiting 2025, the year will likely stand out as a growth-oriented period for capital markets—one shaped by easing monetary policy and rapid technological advances, particularly in AI—renewing investor appetite.
To recap the key drivers of these shifts, Cantor’s editorial team connected with leaders across the firm’s major coverage areas. They shared the macro forces behind sector performance, how these developments affected clients and their investment decisions, and informed outlooks on what 2026 could signal for clients. Certain themes consistently stood out across sectors.
We spoke to key thought leaders from around the firm:
The collective sentiment is as follows — heading into 2026, clients should prepare for a macro environment shaped by a wide range of dynamics, such as evolving regulatory policies and the continued influence of interest rates, as well as the potential for greater volatility alongside new opportunities.
Equities
A year of strong returns
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We anticipate a cocktail of factors that will contribute to significant volatility and sharper market swings in 2026…
Eric Johnston
Chief Equity And Macro Strategist
This year, equity markets delivered strong returns, boosted by technology, utilities, and communications. The traditional, cap-weighted S&P 500 outpaced the equal-weight index by roughly 7%, reflecting investors’ continued concentration in the largest tech companies. Enthusiasm around growth—particularly AI—pushed many stocks to higher valuations, sparking concerns around potential bubbles.
Much of the market’s strength came from companies tied to the AI capital-expenditure buildout, and businesses integrating AI into their operations. Markets were also supported by a 0.75% rate cut from the Federal Reserve and expectations for additional easing in 2026. After a slow start, M&A activity gained momentum as economic visibility improved and the regulatory backdrop became more favorable.
We anticipate a cocktail of factors that will contribute to significant volatility and sharper market swings in 2026, including a new, dovish Federal Reserve chair, high equity valuations, and heavy retail positioning. As a result, clients can anticipate a “traders’ market” to remain. AI will continue to be an incredibly important theme and driver for equity return, both on the upside and downside.
Crypto/Digital Assets
Institutional expansion
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In 2026, our priority is to deepen the value we provide to clients…
Brett Knoblauch
Head of Digital Assets Research
2025 was a landmark year for institutions entering the digital asset space, driven in large part by strong post-election support for pro-crypto policies
Meaningful growth was seen in the digital-asset-treasury category, and we anticipate more treasury-focused companies emerging to support protocols as the market matures.
In 2026, our priority is to deepen the value we provide to clients. Cantor is expanding its research team to deliver more granular, on-chain analysis and enhanced coverage of underlying digital assets. We will be sharpening our focus on protocol-level activity, market structure, and the competitive landscape across major Layer-1 ecosystems—ensuring clients stay ahead of the opportunities that will shape the next phase of the digital asset evolution.
IPO Activity
Momentum builds
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The year ahead is already shaping up to be strong for new issuance…
Beau Bohm
Global Co-Head
Equity Capital Markets
In 2025, our clients were able to take advantage of IPO activity across all major sectors, particularly within the tech and fintech sectors. A steady flow of issuances also continued across industrials and healthcare. Tariff-driven volatility muted Q2 volumes, and a government shutdown slowed Q4 filings. Despite these headwinds, 64 IPOs raised over $15 billion in Q3—the strongest quarter since 2021.
Crypto and Digital Assets, AI and Data Infrastructure, and Aerospace & Defense were the standouts in terms of activity volume. Their successes reflected broader market trends – investors being growth-oriented toward regulatory-ready, institutional crypto ecosystems, AI platforms accelerating enterprise adoption, and mission-critical A&D technologies. All of this contributed to the 2025 IPO class having an average first-day return of 16%.
The year ahead is already shaping up to be strong for new issuances, supported by a large pipeline of companies moving their filings through the SEC. The potential for “review congestion” could occur, due to late 2025 delays pushing some even further into 2026, when several large and mega-cap tech IPOs are expected to come to market. Regardless, overall sentiment points to a healthy and active 2026 issuance environment across sectors.
Industrials
Dual-market dynamics
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…As confidence in global trade and the U.S. economy strengthened, market conditions improved, creating more constructive conditions for our clients.
Jim Nappo
Global Head of Industrials
Investment Banking
2025 was a tale of two markets. The first half of the year was plagued with tariff concerns, trade policy shifts, and persistent inflation, slowing down capital markets and M&A activity. Confidence grew in the second half of the year due to a strengthened U.S. economy and improved market conditions, bringing new momentum for clients across Industrials.
Investments in AI and data-center expansion, along with a renewed focus on manufacturing reshoring, drove significant capital-raising and strategic M&A deals across multiple sub-sectors. Aerospace & Defense remained a bright spot, while Automotive faced continued headwinds. Across the board, companies pursued aggressive takeover attempts to push through long-delayed mergers while interest in de-SPAC mergers returned, amid clearer regulatory rules and renewed SPAC fundraising.
Going into 2026, we anticipate private equity firms will exit older assets, and lower capital costs may reset markets, supporting strong capital markets backed by real earnings growth. Companies will need flexibility as global geopolitical shifts continue.
Financial Institutional Group (FIG)
A healthy dynamic
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We anticipate continued support from regulators and investors for well-structured M&A activity.
Chris Sanger
Head of Financial Institutions Group
This past year brought meaningful and dynamic shifts—from deregulation and rate cuts to changing market sentiment— that ultimately created a constructive environment for our clients. Public equity markets remained open and supportive, enabling banks, insurers, and financial technology companies to access capital. In 2025, private capital expanded, with large pools of undeployed capital providing demand to help support asset prices despite market moves.
Reduced regulatory friction opened the door for strategic M&A and new entrants into the banking landscape. Larger buyers became increasingly active, and new bank charters for non-traditional players introduced fresh competition and innovation. Specialty finance companies also performed well, supported by steady financing channels and strong investor appetite.
As we approach 2026, the environment remains highly constructive for clients. We anticipate continued support from regulators and investors for well-structured M&A activity. Plenty of unused capital will remain at credit funds, private equity firms, and other asset managers, helping to keep asset prices up. Overall, company performance should remain strong across financials, providing capital into the financial system, and continuing to support strong valuations and strategic activity.
