Global Financial Markets Review

Global equity markets reached record highs in May despite Middle East tensions, led by the tech sector and AI optimism. UBS recommends diversifying portfolios into broader equity sectors and locking in higher bond yields.

Key Takeaways

• 1.Global equities reached record highs in May, with the MSCI ACWI returning 5.4% and S&P 500 gaining 5.3%.
• 2.Geopolitical tensions in the Middle East persist, but markets anticipate a diplomatic solution for the Strait of Hormuz, causing oil prices to decline.
• 3.Investors should diversify away from tech megacaps as market leadership is expected to broaden into other sectors like health care and industrials.

Table of Contents

• May 2026: Month in review
• Global financial markets
• May in review
• Asset class developments
• Equities
• Fixed income
• Commodities
• Global asset class preferences
• Global asset class preferences definitions
• Appendix
• Risk information

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