Markets and Macro Observations on H1 2026

The report reviews a dynamic first half of 2026 characterized by strong equity market performance led by AI infrastructure and cyclical sectors. It projects further gains for global equities in H2 while highlighting the volatility inherent in a pro-cyclical, high-leverage environment.

Key Takeaways

• 1.The S&P 500 achieved a +10% total return in H1 2026, supported by strong performance in small caps and AI-related infrastructure.
• 2.North Asian markets, particularly Korea, Taiwan, and Japan, have outperformed due to their central role in the AI infrastructure supply chain.
• 3.The market remains in a pro-cyclical environment driven by technological transformation and significant deficit spending, with a continued outlook for higher global equities.

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