Why companies are preparing for increased volatility in 2026

      The first half of 2026 has experienced significant economic uncertainty, characterized by fluctuating fuel prices, rising inflation, and market declines. Here’s why it’s essential for leaders to remain adaptable as they face the unpredictable months to come.

      This period has been marked by notable economic volatility, compelling business leaders to steer through a uniquely erratic market featuring dramatic shifts in gas prices, unexpectedly favorable inflation figures, erratic consumer behavior, and nervous markets.

      As leaders plan for the future, they prepare for further fluctuations. Below is a brief overview of the past six months and how adaptability will determine success in the latter part of 2026.

      Uncertain Fuel Pricing

      In 2025, EY pointed out that fuel would be a challenging sector to prepare for in the short run. Although some market indicators seemed positive, EY also highlighted the ongoing uncertainty stemming from the global nature of the oil, gas, and chemicals sector.

      As predicted, that uncertainty has materialized multiple times in 2026. By March, gas prices surged sharply due to global supply anxieties. Crude oil prices escalated quickly, pushing the cost of regular gasoline from $2.98 per gallon in late February to $4.08 per gallon by April 2, a rise of over a dollar in just a month.

      Easing tensions in late spring resulted in a rapid decline as supply fears diminished, leading many to believe things were returning to normal. However, by mid-summer, prices began to escalate again as concerns about potential disruptions in the oil supply chain resurfaced.

      While there is no clear sign of what lies ahead, EY had already cautioned last year that companies would likely experience a level of uncertainty greater than seen in several years. This doesn’t necessarily mean higher fuel prices or reduced activity in the latter half of 2026, but it remains a significant possibility, and businesses are clearly preparing for the unknown.

      EY added that even within the oil, gas, and chemicals sector, companies are actively seeking strategies to manage this uncertainty. Mergers and acquisitions are expected to proceed, driven by companies aiming for cost efficiencies that bolster their resilience during economic downturns.

      Inflation and Market Conditions Are Heightening Volatility

      While gasoline prices influence the global economy, other factors are also complicating the current economic landscape. This combination of mixed signals is making it increasingly challenging for leaders to anticipate future developments.

      For instance, the Consumer Price Index (CPI) fell by 0.4% in June, bringing the annual inflation rate down to a surprising 3.5%. This was welcome news for both consumers and business owners.

      However, a concurrent tech sell-off in June severely impacted stock prices. The tech sector proved particularly vulnerable, and in just one day at the month’s start, the Nasdaq plummeted by 4.1%, wiping out a month’s worth of gains. This sell-off has continued sporadically, and as of now, even the highly regarded stock of a leading space company has fallen below its IPO price within weeks of significant initial gains.

      Navigating an Uncertain Economy

      The one reliable aspect of the current economy is its inconsistency. Good and bad news are intertwined, pulling markets in different directions and leaving many businesses anticipating further economic turbulence in the coming months.

      The biggest challenge is that few, if any, of these issues have clear solutions. For example, gas prices could continue to rise, restricting consumer spending, yet they might also decrease if geopolitical tensions subside. Should that occur, it could present businesses with opportunities to capitalize on improved consumer sentiment.

      Ultimately, what business leaders should focus on is not crafting an exact plan for the next few months, but rather on fostering adaptability, resilience, and contingency strategies. The more leaders can uphold a level of flexibility through measures like cash reserves and quick decision-making, the better positioned they will be to thrive in the months ahead.