Buy into this area of the stock market for big gains in 2026, says BofA's top markets strategist

Core Viewpoint - Tech stocks have significantly contributed to market gains, but there is a shift towards cyclical stocks as attractive investment opportunities for the upcoming year [1][7] Group 1: Investment Strategy - The recommended investment strategy is a barbell approach, balancing investments between technology and cyclical stocks [2] - Cyclical stocks are expected to rebound as the economy recovers, with sectors such as industrials, materials, and financials highlighted for potential opportunities [2][7] Group 2: Economic Outlook - Despite a softening labor market with rising layoffs, the job market is adjusting rather than entering a downward spiral, indicating mixed conditions [3][4] - Key drivers for economic growth anticipated in 2026 include continued consumer spending, capital investments, a weaker dollar benefiting exports, and an uptick in global growth [5][6] - Fiscal and monetary stimulus, including expected Federal Reserve interest rate cuts in 2026, are projected to further stimulate economic activity [6][7]