2026 Forecast: Capital Markets Deal with Infrastructure Shifts and the Needs of AI

As we head into a new year, capital markets participants are engaged in the annual ritual of looking ahead to the defining shifts of 2026. Following a year that dealt with regulatory mandates and unprecedented technological investment, the focus now seems to be squarely on infrastructure strategy, the utility of the public cloud, and the continued rise of artificial intelligence as a necessary competitive tool.

Here are the top trends and outlooks shaping the trading community in the year ahead.

1. Overnight trading venues will continue to heat up

One of the most significant trends of the past year has been the elevation of overnight trading venues from a “nice to have” to something that firms seriously consider. We saw this supported by regulatory actions, such as the SEC approval and start of trading at venues like 24 Exchange.

Looking through 2026, the competitive landscape for these venues is set to crystallize. While Blue Ocean currently maintains the most liquidity, other venues will continue to build up and emerge as choices for firms trading overnight equities. Success for these venues will depend on making the entrance process easy for adopting firms and finding ways to integrate with other global exchanges to benefit market makers and generate liquidity.

2. The AI investment boom generates a proximity land grab

There cannot be a discussion of 2025 trends without addressing the immense capital flowing into artificial intelligence. This is not isolated to finance, it is something impacting every industry and vast amounts of capital will be dedicated to it in 2026. We expect it to play a much bigger role in the financial industry moving forward.

A direct residual effect of this technological push is the massive investment in data centers. In 2026, firms will need to become smarter and much more selective about where they locate their server farms. This translates directly to an increased emphasis on proximity to markets, leading infrastructure providers to build assets and develop strategies that deliver low-latency connection without geographic drawbacks.

3. AI modeling demands unprecedented compute power

While the trading industry has historically been slower to adopt new technology, AI has felt different, which has prompted widespread interest in efficiency and returns. However, the immediate impact of AI on the capital markets will likely center on back-office operations rather than live trading – for now.

Our prediction is that AI will revolutionize the way firms develop trading strategies by modeling and back-testing based on historical data and dynamic market conditions. This capability will lead to a massive increase in the necessary level of compute power.

4. The cloud utility model hits its limit

In 2026, we may start to see a shift that was unexpected just a few years ago – backpedaling away from public cloud services. After years of migration, firms are discovering that the public cloud can fail to achieve the cost synergies and required performance profiles they initially sought.

Specifically, the public cloud’s latency profile and uptime are often not meeting the stringent requirements of the trading community. Firms are increasingly recognizing limitations regarding scaling in the cloud and the high cost associated with extracting data. This means large-scale migrations could start moving applications back toward private cloud, colocation, and direct market proximity.

5. Emerging markets rise

Finally, 2026 is poised to see continued geographic expansion and a much-needed injection of technical innovation.

India’s derivative market is predicted to expand significantly. This growth is likely to be driven by the exchange’s member-friendly approach and its efficiency in attracting global liquidity.

More broadly, smaller funds are looking toward emerging markets (such as smaller exchanges in Asia and South America). This is a strategic move, as the largest, most competitive markets are yielding diminishing returns for smaller players who risk being picked off by big market players.

There is an optimistic expectation for a rise in technical ingenuity in 2026. Firms that enter the year with a clear infrastructure plan will be better prepared to manage shifts in technology and trading behavior. The relationship between data center placement, market access, and automation will shape how firms operate day to day. The next phase of growth in capital markets will depend on how well participants can turn these changes into practical advantages.

Rick Gilbody is Global Head of Sales and Marketing at TNS Financial Markets. His expertise includes data center colocation, low latency exchange infrastructure, network design and real-time market data.