Market Updates

The Middle East conflict is driving an energy-led supply shock that is raising inflation risks and pushing long-term Treasury yields higher, reinforcing a cautious outlook on long-term bonds while favouring U.S. equities.

Markets are grappling with heightened volatility driven by Middle East tensions and energy price spikes, while upcoming global inflation and growth data will shape expectations for economic momentum and policy direction.

Amid geopolitical tensions, tech sector volatility and evolving AI dynamics, investors should focus on fundamental economic drivers and remain flexible, with a long-term preference for high yield credit and infrastructure.

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.

Markets face a packed week of global inflation, labour and growth data alongside heavy central bank commentary, as investors digest fragile US employment signals, renewed expectations for Fed easing, China’s policy support measures, and lingering volatility after last week’s AI-led risk wobble.