Market Updates

U.S. equities continue to reach record highs despite disruption in the Strait of Hormuz, as resilient AI-driven growth offsets the economic drag from supply-chain and energy shocks, leaving inflation pressures and rising bond yields as the primary risks to the constructive market outlook.

Markets this week will be driven by a heavy mix of geopolitical developments, central bank commentary, and key inflation and growth data, as investors navigate rising stagflation risks, shifting Fed expectations, and ongoing geopolitical tensions impacting global energy markets.

Middle East–driven supply shocks are adding to inflation pressures, leaving central banks balancing growth risks, while higher yields persist and support a preference for equities—especially U.S. and EM—over long-term bonds.

A data- and policy-heavy week with central bank decisions, key economic releases, and geopolitical risks all shaping market sentiment.

Renewed optimism from U.S.-Iran talks has pushed stocks to record highs, with tech-led gains and strong AI-driven revenue and investment trends reinforcing confidence in overweighting U.S. equities and AI opportunities.

Market sentiment remains fragile amid US-Iran tensions and policy uncertainty, even as strong earnings and resilient global growth—particularly in the US and China—provide some support to markets.

BlackRock return to a modestly risk-on stance, overweight U.S. equities, watching for progress on reopening Strait of Hormuz shipping and confirmation that macro impacts remain contained, as resilient earnings (supported in part by AI) continue to underpin the outlook.

Global markets this week will be driven by IMF–World Bank meetings, key economic data releases, and the start of US earnings season, against a backdrop of shifting inflation expectations and easing—but still fragile—geopolitical tensions.

The Middle East-driven supply shock underscores a selective approach to emerging markets, where uneven impacts, strong year-to-date performance, and varying energy exposures favour quality equities and EM hard currency debt.

Rising geopolitical tensions and AI-driven energy demand are accelerating investment in energy and infrastructure, supporting a diversified, active multi-asset approach to capture opportunities while managing uncertainty.