Tax-rebate checks are expected to start reaching consumers in the second quarter, but most of the relief from Trump’s One Big Beautiful Bill Act is aimed at businesses.
Stocks may get another strong boost next year as taxpayers begin receiving refunds tied to President Donald Trump’s major tax-and-spending package signed into law this summer.
While promoting the tax cuts Monday, White House National Economic Council Director Kevin Hassett said many workers who no longer owe taxes on tips or overtime could see an extra $1,600 to $2,000 next year. “A lot of that will come as tax refunds at the beginning of the year,” he told CNBC. Hassett is also seen as a leading contender to replace Fed Chair Jerome Powell in May.
Analysts at the Wells Fargo Investment Institute expect roughly $517 billion in tax refunds next year — a surge they believe will help “reignite broad consumer spending,” support economic growth and fuel markets.
If accurate, it would mark one of the largest refund years since 2017 outside of the pandemic-stimulus spike in 2020–21.
“We expect the nearly 44% year-over-year increase to meaningfully boost consumer spending and help the U.S. economy gather renewed momentum in 2026,” wrote Jennifer Timmerman, investment-strategy analyst at Wells Fargo Investment Institute.
Wells Fargo projects the S&P 500 to end next year between 7,400 and 7,600, while the 10-year Treasury yield is expected to remain in the 4%–5% range. On Wednesday, the 10-year yield stood at 4.15% and the S&P 500 closed just below record highs at 6,886 — on track for a 17.1% annual gain.
A bumpy start for stocks next year?
Meghan Shue, chief investment strategist at Wilmington Trust, expects this year’s rally to carry through December but is more cautious about the first quarter. After a strong 2025—especially for AI stocks—she anticipates heightened volatility and portfolio rebalancing, including selling and profit-taking.
She also flagged tariff-related uncertainty. Many businesses may be delaying passing higher import costs to consumers during the critical holiday season. “There could be more supply-chain pressure and more tariff price increases to come in the first quarter,” Shue said.
Conditions should improve in the second quarter as clarity around tariffs and tax relief emerges. For consumers, that means the arrival of tax refunds. For businesses — the biggest beneficiaries of the tax package — the impact will hinge more on capital-expenditure incentives than timing.
