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Markets face a packed week of key US data and global PMIs amid heightened geopolitical tensions, sticky inflation and shifting rate-cut expectations, while China pivots toward structural demand support and AI-driven economic strategy.

While markets remain fixated on the AI buildout, expanding fiscal stimulus and structural reforms in Japan and Europe are creating broader investment opportunities, particularly in Japanese equities and European infrastructure, pharma and financials.

A packed week of key economic data, central bank speeches and major earnings comes as markets navigate geopolitical tensions, sticky inflation, shifting rate-cut expectations and growing focus on China’s policy outlook amid signs of renminbi strength and potential structural stimulus.

The recent software selloff reflects a shift from questioning AI’s viability to fearing its disruption, reinforcing heavy AI-driven investment and borrowing that could pressure rates higher, leaving BlackRock constructive on U.S. equities and credit but increasingly selective.

This week, markets will focus on the FOMC minutes, US PCE inflation and major earnings, alongside a heavy slate of UK, eurozone and US data, as investors balance softer US growth signals and easing inflation expectations with active central bank commentary and China’s pivot toward boosting domestic consumption.

Emerging market stocks and bonds have started the year strongly after a standout 2025, and with supportive global conditions and disciplined policy, BlackRock remain overweight—favouring selective opportunities in AI-driven Asian tech, Latin American commodities, and hard currency debt.