2026: Trump's bad year?

The core reason to lean Yes is that the described bear case is not a single binary event but a pattern: adverse court rulings or active litigation, policy rollbacks being challenged, and a weaker macro backdrop that can feed an unpopular political atmosphere. Several of those ingredients are already present. Trump is facing fresh legal pushback on public-land actions, the ballroom dispute remains live despite a procedural win, and the administration’s antitrust and regulatory agenda has not produced clean victories. If the economy continues to look sticky on inflation and rates, that can reinforce a “bad year” framing even without a dramatic collapse in fundamentals.

The main reason to be cautious is that many of the cited developments are still unresolved, and some are only partial setbacks rather than definitive defeats. Courts can delay, narrow, or eventually uphold actions, and political narratives are often more durable than legal ones. If the definition of the bear case requires a clear, widely recognized turning point such as a major election loss, a major recession, or a decisive judicial rebuke, then the probability would be lower than if it merely requires a recognizable year of accumulating headwinds.

Against the current market, the pricing implies near-certainty that the bear case will not occur, which looks too extreme given the breadth of risks and the amount of time left in 2026. The market may be anchoring on Trump’s resilience, his frequent ability to survive adverse headlines, and the fact that some individual disputes are still pending. But for an event defined by a general bad-year narrative, a 5% Yes price understates how often multiple adverse developments cluster within a presidential year. I would price this closer to a cautious mid-range probability rather than a near-zero one.