Weekly Global Market Update

Investors are weighing the impact of prolonged Middle East tensions and sticky US inflation on interest rates, while focusing on NVIDIA's results as a barometer for the AI cycle. UBS maintains an attractive view on global equities but suggests diversifying away from megacap tech concentration.

Key Takeaways

• 1.Middle East tensions, specifically the Iran conflict and potential closure of the Strait of Hormuz, are driving oil prices and yields higher while dragging on equities.
• 2.Stronger-than-expected US inflation data (CPI and PPI) has shifted market expectations toward a potential Fed rate hike in 2026, with Kevin Warsh starting his first week as Fed chair.
• 3.The AI investment cycle is broadening toward 'agentic AI' and consumer applications, with NVIDIA's upcoming results seen as a critical test for industry demand and monetization.

Table of Contents

• What to watch in the week ahead
• What comes next for the Middle East conflict?
• Iran latest developments and geopolitics
• The outlook for yields
• The tech sector and earnings
• Will the renewed rise in yields derail stocks?
• Can AI earnings keep equities focused on fundamentals?
• Chart of the week
• Global asset class preferences definitions
• Appendix

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