Will there be a stock market crash in 2026? There’s always a chance. That’s why investors will want to prepare should a crisis come our way.
A crash could come in the way of something unforeseen. The pandemic, for instance, came along and caused a 20% drop in the markets, albeit a brief one. Or a crash could be something everyone and their dog has claimed is coming – like the hype surrounding artificial intelligence.
Little growth
I must confess I’m a touch bemused with what’s been going on with tech and AI companies of late. Untold billions are being throw around with scant reward, only promises of a brighter tomorrow that’s ‘definitely’ coming (trust us!)
A prominent MIT study highlighted this, titled State of AI in Business 2025. It found that 80% of companies and organisations had investigated or used AI tools like ChatGPT. Only 5% achieved a return on investment.
Across sectors as diverse as healthcare and energy, the same thing was true over and over: AI isn’t delivering much or any growth. One unnamed chief dismissively referred to the attempts as “science projects”.
Worryingly, one of the main uses of AI was for “headcount reduction”. This could have long-term implications if a new generation of workers isn’t getting training and experience because junior jobs are being done via AI.
That’s not to say the wheels are going to fall off any time soon – and the same study found promising signs in individuals’ productivity – but investors may wish to think about diversifying into more defensive companies that could weather a 2026 stock market crash.
Green shoots
One defensive-minded stock that investors might consider is Rio Tinto (LSE: RIO). The £97bn mining giant has had a weak few years since the pandemic but the green shoots of a recovery are there. The share price is up 41% since July.
Mining stocks tend to be cyclical. That means the firm’s fortunes wax and wane, often coinciding with the changing prices of raw materials. For example, the two best performing FTSE 100 stocks of this year were miners specialising in gold or silver – those two metals shot up in value over 2025.
It’s hard to say whether any stock market crash will mostly affect one sector (like the dotcom crash) or whether can crater the economy at large (like the 2008 recession). This means even a defensive stock like Rio Tinto may not be insulated if a crash comes.
That said, I think there’s plenty of value on offer here. The Rio Tinto price-to-earnings ratio is around 12 at the moment. For context, the FTSE 100 is around 19 and the S&P 500 is around 29. At such a low valuation, the share price may have less room to fall in the event of a crash.
