Seeking Alpha Predicts Volatile January 2026 and Bear Market Onset: AI Bubble and SCOTUS Tariffs as Catalysts

On December 28, 2025, Seeking Alpha published an article warning of impending market volatility in January 2026 and the likely start of a bear market, citing two primary catalysts: the bursting AI bubble and an upcoming SCOTUS decision on tariffs imposed by the Trump administration [6]. The article notes that markets are currently pricing in a “Goldilocks” 2026 outlook based on Federal Reserve projections [6][5].

Recent market data shows mixed performance in AI-exposed sectors: the Technology sector declined 0.147% on December 26, while Communication Services (with AI components) gained 0.698% [0]. Key AI stocks exhibited mixed pre-market trends on December 28: NVIDIA (NVDA) +1.02%, Microsoft (MSFT) -0.06%, Alphabet (GOOGL) -0.18% [0]. A 1.91% drop in the tech-heavy NASDAQ Composite on December 17 reflects early AI bubble concerns [0].

Fed projections (December 2025) estimate median 2026 real GDP growth of 2.3%, inflation of 2.0%, and a Fed funds rate of ~3.625%, aligning with the “Goldilocks” market sentiment [5]. However, AI-related capital expenditures (CAPEX) contributed 1.1% of U.S. GDP growth in 2025, amplifying downside risk if AI enthusiasm wanes [3].

The SCOTUS decision (expected end-2025/early 2026) on Trump’s IEEPA tariffs could disrupt supply chains and trigger billions in duty refund claims if ruled against the administration [1]. The tariffs currently range from 10-41% on imports from most countries, with importers awaiting clarity [1].

1. The AI sector’s significant contribution to U.S. GDP growth (1.1%) means a bubble burst could have broader macroeconomic impacts beyond just tech stocks [3].
2. The transition from “Goldilocks” expectations to bearish sentiment could be accelerated if upcoming economic data fails to meet Fed projections [5][6].
3. The SCOTUS tariff ruling’s ripple effects extend to both importers (potential refunds) and domestic industries (protection loss), creating dual-layered market uncertainty [1].
4. Mixed performance of major AI stocks (NVDA up, MSFT/GOOGL down pre-market) indicates divergent investor sentiment regarding AI’s short-term trajectory [0].

• AI Sector Correction
  : A slowdown in AI CAPEX or missed earnings targets could trigger a broader market correction due to the sector’s high weight in key indices [3].
• SCOTUS Tariff Ruling
  : A decision against tariffs could disrupt domestic protected industries (e.g., manufacturing) while benefiting importers [1].
• Sentiment Shifts
  : The market’s current “Goldilocks” pricing may be fragile, with the potential for rapid reversal if catalysts materialize [5][6].

• A market correction could create long-term investment entry points for fundamentally strong companies, though timing is uncertain.
• Clarity from the SCOTUS ruling could resolve trade uncertainty, benefiting industries affected by tariff ambiguity.

This analysis synthesizes the Seeking Alpha article’s bear market prediction, its catalysts (AI bubble burst, SCOTUS tariffs), and supporting market data. Key points include:

• Markets currently price a “Goldilocks” 2026 based on Fed projections (2.3% GDP, 2.0% inflation) [5][6].
• AI-exposed sectors show mixed performance, with a recent NASDAQ dip signaling early volatility [0].
• AI CAPEX contributes 1.1% to U.S. GDP, amplifying sector risk [3].
• The SCOTUS tariff ruling could result in billions in refunds and supply chain disruptions [1].
• The prediction’s validity depends on AI sector earnings, SCOTUS outcome, and economic data alignment with Fed projections.