So, are the bears right? Here are my thoughts on the current chaotic market climate.

Will US stocks crash in 2026?

There are some justified causes for concern in the stock market right now.

The S&P 500 is trading at a price-to-earnings ratio of 31 – almost double its long-term average. Meanwhile, the decline in employment and job quality is creating cracks in the US labour market. Throw in the expected pressure of US tariffs driving up costs, and the stage seems to be set for a potential recession later this year.

However, while valuations are undoubtedly lofty, they’re driven by expectations of robust earnings growth.

The latest consensus suggests that profits across the S&P 500 could rise by 14.6% this year before reaching 15% in 2027. By comparison, the average across the last decade has been closer to 8.6% suggesting that US stocks may not be as overvalued as some investors believe.

At the same time, continued interest rate cuts by the Federal Reserve, along with fresh economic stimulus through tax cuts coming later this year, a recession could ultimately be avoided.

That’s why I remain cautiously optimistic about 2026.

An emerging opportunity?

Despite economic pressures throughout 2025, US consumer spending has proved to be quite resilient, especially when it comes to e-commerce. And the Buy Now Pay Later platforms have definitely been helping out on that front.

Used correctly, these tools can drastically improve the affordability of higher-priced products. And one BNPL company that stands out is Sezzle (NASDAQ:SEZL).

Unlike other BNPL firms, Sezzle’s business model isn’t focused on building merchant relationships. Instead, it takes a consumer-first approach, where users pay a monthly subscription fee to use its BNPL solution at any merchant in America by leveraging a virtual or physical debit card.

This subscription-based business model has translated into the largest profit margins in the industry at 28.2% compared to Klarna‘s -10% and Affirm‘s 8.6%. And when combined with 67% revenue growth, earnings have been skyrocketing.

What’s more, this growth could accelerate in 2026 even if the labour market continues to weaken. After all, when household incomes fall, demand for alternative financing solutions rises.

My £15,000 contrarian US investment

The situation is a bit of a double-edged sword. If economic conditions deteriorate too much, credit losses for BNPL firms like Sezzle could expand rapidly as consumers fail to keep up with their payment plans.

By having an average loan duration of 42 days, the company can quickly adapt and adjust customer spending limits to prevent a runaway credit loss spiral – an advantage that traditional credit card companies don’t have. However, while financially prudent, this could significantly hamper growth, sparking unpleasant volatility.

Yet despite the group’s impressive profitability and rampant growth, Sezzle seems to be one of the few US stocks that’s still trading at a relatively modest valuation. Even after a recent 40% rally, the forward price-to-earnings ratio still stands at just 16.9, up from 12.8 when I began buying the shares. And at that price, the risk is worth considering in my opinion.

The post Is the S&P 500 heading for an epic stock market crash in 2026? appeared first on The Twelfth Magpie.

A rising fintech

First on the list is Toast (NYSE:TOST). The firm offers a complete restaurant operating system, solving the headaches of digital ordering, reservations, marketing, supply chain management, payroll, accounting, analytics, and even financing.

This all-in-one solution is already deployed at over 156,000 locations with 22,000 added since the start of 2025. And with adoption accelerating, its latest third-quarter results showed 30% revenue expansion, a 147% operating profit surge, and an upgrade to full-year guidance.

Despite this record performance, the shares are actually down by around 8% since the start of the year. Why?

The fear is that with pressure rising on everyday American households, restaurant trips could be cut back. And since Toast makes the bulk of its money by charging a small transaction fee on each order, that signals a potential slowdown.

It’s a valid concern. But it might be overstated.

Even if footfall waivers, the added cost-saving benefits of deploying Toast could turn this into an adoption tailwind, resulting in further location growth offsetting the impact on earnings. That obviously isn’t guaranteed, but at a forward price-to-earnings (P/E) ratio of 27, it’s a risk I’m willing to take.

Getting more exotic

The second stock I’ve been buying is a bit more volatile – Sezzle (NASDAQ:SEZL). Unlike Toast, Sezzle’s been a strong performer in 2025, rising by 20% since the start of the year. Yet at one point, it was up over 300%!

The Buy Now, Pay Later (BNPL) platform has grown dramatically over the last 12 months, sparking over-enthusiasm that eventually tumbled back to reality. But then the shares kept falling. And now the stock trades at a dirt cheap forward P/E of just 12.8.

Yet once again, the share price doesn’t align with the fundamentals.

Thanks to its subscription-based approach to BNPL, Sezzle has the highest operating profit margins in the industry at 30%. And in its latest results, revenue skyrocketed by 67% paired with a 71% jump in earnings, driven a 53% surge in transactions to 9.5 million during the quarter.

So why’s the market pricing this stock so cheaply? Again, the answer lies in macroeconomics. A weaker US consumer increases the credit risk of Sezzle users not keeping up with payments. And the group’s provisions for credit losses did tick up slightly – a potential early warning sign that this has already started to happen.

However, this uptick seems to be a seasonal shift rather than a structural one. In fact, management actually lowered its credit loss provision guidance for 2025, indicating confidence in the quality of its credit. And if market conditions turn out to be better than investors are expecting, a rebound could emerge.

The bottom line

Out of these stocks, Sezzle’s definitely the riskier investment. But in my opinion, both look like underdogs that could thrive in 2026 once economic conditions stabilise. That’s why I think investors hunting for shares to buy may want to take a closer look at these under-the-radar opportunities. Yet, these aren’t the only shares I’ve been buying lately.

The post These are my best shares to buy in an ISA for 2026! appeared first on The Twelfth Magpie.

But could this have created lucrative buying opportunities?

The stage is set for a potential correction

Meta saw its share price slump 16% on the back of its latest earnings. Netflix dropped by double-digits, The Trade Desk also stumbled, along with Advanced Micro Devices, Palantir, and even Nvidia. Meanwhile, it’s been nothing but a horror show for shareholders of Trex and elf Beauty, both down over 30%.

Since then, some of these businesses have begun bouncing back. And the S&P 500 as a whole is still showing some resilience now that the US government shutdown is seemingly close to a resolution.

But with a substantial backlog of critical inflation, employment, and economic data, investor sentiment could quickly turn sour if a wave of negative insights suddenly hits the markets all at once.

So far, the US economy has proven to be quite resilient. And if the delayed data continues to reveal better-than-expected performance, US stocks could continue to climb higher. Nevertheless, I believe the overall level of risk is rising.

There are still buying opportunities

Despite stretched valuations, there are still plenty of US growth stocks that remain attractive. And one business I’ve steadily been topping up on over the last few months is Sezzle (NASDAQ:SEZL).

As a quick introduction, Sezzle’s a Buy Now Pay Later (BNPL) platform targeted towards Millennials and Gen Z operating in North America as an interest-free alternative to credit cards. And unlike other BNPL companies, Sezzle operates with a consumer-focused subscription business model.

The bulk of revenue still comes from transaction fees. But around a quarter of the group’s cash flow actually stems from recurring monthly subscriptions that allow users to execute BNPL transactions at any merchant in the country using a virtual or physical Visa-powered debit card.

This rather unique way of doing business means that not only is Sezzle profitable, but it also has some of the highest profit margins in the entire BNPL industry.

Fierce competition

Despite the strong financials, Sezzle shares have been stuck on a downward trajectory these last few months.

Some of this is undoubtedly profit-taking. Fun fact: between July 2024 and July 2025, the stock surged more than 1,100%! But some of this is also undoubtedly linked to competitive threats.

A key rival – Klarna – recently made its debut on the US stock market and is a giant processing over $100bn in gross merchandise volumes compared to Sezzle’s $2.5bn in 2024. And with far deeper financial pockets, there’s a growing question of how Sezzle can be successful in this ‘David versus Goliath’ story.

So far, Sezzle’s results suggest it’s holding its own, carving out a niche within the BNPL space. And while the company’s certainly sensitive to the US economic climate, at a forward price-to-earnings ratio of just 14.1, Sezzle looks like one of the cheapest explosive growth stocks on the US stock market right now, in my opinion.

That’s why I’ve already started steadily buying shares. But this isn’t the only exciting opportunity I’ve got my eye on right now.

The post 1 growth stock I’m buying as the US stock market starts to dip appeared first on The Twelfth Magpie.

In other words, we want stocks with low growth-adjusted earnings multiples and the share price is already going up.

However, today, the stock market is hot. Indexes around the world are at record highs. In places, the market is looking a little too hot — stocks have to work hard to justify valuations.

With that in mind, I’m not stopping investing. I’m just investing slightly differently.

Of course, the focus should still be on finding undervalued stocks. But instead I’m looking more closely at companies that have suffered from poor momentum.

What’s behind the change?

So, why is that?

Sometimes, when stocks fall, the valuation isn’t the most important thing. It’s the perception. And if a stock has run up a long way, it can fall just as fast.

Overlooked stocks may become more popular if investors start to sell hot stocks and seek relative safety.

One stock that has already been through this cycle, and has since seen it’s share price cool off is Sezzle (NASDAQ:SEZL).

The buy-now-pay-later provider currently trades around 24 times forward earnings. That’s a 120% premium to the finance sector, but a considerable discount to the likes of Affirm Holdings.

This price-to-earnings (P/E) ratio is expected to fall to 18 times for 2026 and then 15 times for 2027. It also has a strong balance sheet.

Of course, there’s very little point comparing Sezzle to a financial services company because its margins are exceptional.

The Rule of 40 is a quick way to gauge how efficiently a software company grows. It adds revenue growth to profit margin — and anything above 40% is considered impressive.

Sezzle isn’t just clearing that bar, it’s smashing it.

The firm’s recent performance sits around a score above 130. That’s an extraordinary feat in a high-interest-rate environment where many growth stocks still struggle.

For comparison, Palantir — one of the market’s standout growth stories — runs at about 25% revenue growth and a 20% operating margin.

It’s a much larger business, but Sezzle’s strength is remarkable given how little attention it gets.

It could quietly be shaping up as one of the most exciting growth stories of the next few years.

The risks? Well, as a business it could experience weakness if the US consumer comes under pressure.

However, I absolutely believe other investors should consider it. Having shed 50% of its valuation, it really doesn’t look expensive now to me.

It’s not a hard and fast rule

Of course, every investment is different.

There are several stocks in my portfolio at all-time highs, which I still like. This includes Micron and Nvidia.

However, my preference is certainly for stocks that appear more overlooked in recent months.

This is the likes of the London Stock Exchange Group, Jet2 and even Hikma. Even in a hot market, there’s plenty of opportunity.

The post 1 change to consider as the stock market reaches all-time highs appeared first on The Twelfth Magpie.