Mergers and acquisitions activity in the U.S. middle market is positioned to grow in 2026 as confidence among corporate executives and private equity firms reaches its highest level in six years. A recent research shows 58% of respondents now describe the deal environment as strong, signaling a shift from the caution that weighed on transactions earlier in 2025. Improved sentiment reflects greater economic clarity following a period marked by higher costs, supply chain disruption, and trade policy pressures. While many companies felt the impact of tariffs last year, expectations for economic growth and potential interest rate cuts are strengthening the outlook for dealmaking.
Private equity firms are expected to be a major source of activity as confidence rebounded sharply in 2025, with most sponsors expecting deal flow to hold steady or increase in the year ahead. Nearly four in five companies view themselves as potential sellers, driven mainly by valuation considerations, while a majority also see opportunities to act as buyers, with revenue growth as the primary objective. Timing is also shaping strategy, as many sponsors aim to complete transactions before political uncertainty increases ahead of the midterm elections, with the second quarter likely to be the busiest period.
