Piper Sandler: Inflation, Not Growth, Drives Major Stock Market Regimes

Strategists at Piper Sandler have identified five significant shifts in the stock market over the past decade, with inflation—rather than economic growth—emerging as the primary driver of major regime changes.

Key Regime Drivers

According to Piper Sandler’s analysis, the traditional focus on GDP expansion as a market catalyst has been superseded by inflation dynamics. Each of the five distinct market phases in the last ten years was marked by a shift in inflationary pressure, which dictated equity performance, sector rotation, and volatility patterns.

Historical Shifts

The strategists outlined how each regime change corresponded to specific inflation milestones. Periods of accelerating inflation led to defensive positioning and value stock outperformance, while disinflationary phases favored growth and technology equities. The latest regime, they argue, reflects persistent inflation above central bank targets, keeping interest rates elevated and compressing valuation multiples across broad market indices.

Market Context

As of May 26, 2026, the Russian ruble trades at 71.55 against the US dollar (change: +0.34) and at 85.45 against the euro (change: +2.90). Bitcoin is priced at $76,869 (24-hour change: -1.0%). Brent crude oil is estimated at approximately $72 per barrel.