Our Mid-Year Outlook revisits our top 10 themes in light of developments in the first half of the year and sets out how we are positioned for the remainder of 2026. We focus on how each theme has evolved and where we see the most compelling opportunities for investors in the second half.
As we reach the mid-point of 2026, investors find themselves navigating a world that feels both unfamiliar and uncomfortably familiar. The shock from the effective closure of the Strait of Hormuz has revived memories of past energy crises, yet it is unfolding against a backdrop of powerful structural forces: the continued leadership of the US economy, the rapid development of artificial intelligence, and a more fragmented but intensely interconnected geopolitical order.
The immediate consequences of the “Hormuz shock” have included higher energy prices, renewed inflation concerns and a reassessment of the path of interest rates. Markets that had been positioned for a gentle monetary policy easing cycle are now contemplating the risk of policy tightening. This has weighed most heavily on energy-importing regions such as Asia, Europe and the UK, where weaker growth and political uncertainty have compounded the impact of higher input costs.
By contrast, the US has once again demonstrated its resilience. Fiscal stimulus, strong AI-related (artificial intelligence) investment and its position as a net energy exporter have allowed it to absorb the shock more effectively than many peers. We continue to see the US as the primary growth engine among advanced economies in the second half of the year, even as the policy backdrop becomes more complex.
At the same time, the AI investment cycle is reshaping capital markets. Record hyperscaler capex, persistent bottlenecks in semiconductors and a pipeline of high-profile IPOs remind us that AI remains the most powerful secular growth driver in global equities. Yet here too, the regime is shifting from “growth at any price” towards a more discriminating environment, where the ability to convert investment into durable cash flows will separate winners from losers.
In this context, our message is clear. First, stay invested, but be selective: we favour US growth assets, quality companies with strong balance sheets and pricing power, and active approaches in policy-sensitive and IPO-heavy areas. Second, embrace diversification across regions, sectors and asset classes, including private markets and infrastructure, which can offer resilience and differentiated return drivers.
Uncertainty is unlikely to fade quickly. But for patient investors willing to look through the noise, the second half of 2026 offers not just risks to manage, but meaningful opportunities to capture.
Read our Mid-Year Outlook 2026 to discover more.
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