Managing state is arguably the most critical part of building a React application. If you get it right, your app is predictable and easy to debug; if you get it wrong, you end up with “prop drilling” nightmares and out-of-sync UI components.

In 2026, the ecosystem has moved away from the “one size fits all” approach. Instead, we use a layered state management strategy.

1. The Four Types of State

Before choosing a tool, you need to identify what kind of data you are actually handling. Not all state belongs in a global store.

• Local State: Data managed within a single component (e.g., a toggle switch or form input).
• Global State: Data shared across many distant components (e.g., user authentication or theme settings).
• Server State: Data that comes from an API and needs caching/revalidation (e.g., user profiles or product lists).
• URL State: Data stored in the browser address bar (e.g., search queries or filter IDs).

2. Local State: useState and useReducer

For simple, component-specific logic, React’s built-in hooks are still king.

• useState: Perfect for independent variables like isOpen or count.
• useReducer: Better for complex state objects where the next state depends on the previous one, or when multiple sub-values change together.

3. Server State: The Modern Powerhouses

In the past, we used Redux to fetch and store API data. Today, that is considered an anti-pattern. Tools like TanStack Query (React Query) or SWR handle this much more efficiently.

These libraries manage:

1. Caching: Storing data so it doesn’t have to be re-fetched.
2. Loading/Error States: Automatically tracking the status of a request.
3. Refetching: Updating data when the window is refocused or the network reconnects.

4. Global State: Choosing Your Engine

If you truly need to share data globally, you have three main paths in the current USA development market:

5. The “Prop Drilling” Solution: Context API

The Context API is great for avoiding passing props through ten layers of components. However, be careful: whenever a Context value changes, all components consuming that context will re-render. To maintain high performance, keep your Context providers small and highly specific.