Markets Keep Climbing Despite War, Inflation and Election Risks

Capital Group’s Midyear Outlook argues that market resilience has remained intact despite geopolitical conflict, elevated inflation and election uncertainty, supported by AI investment, healthcare innovation and a more attractive bond market.

• Historical data show that equity selloffs triggered by oil-supply disruptions have typically been short-lived, with markets delivering positive returns over one- and two-year horizons following past geopolitical shocks.
• The firm sees opportunities extending beyond technology, highlighting energy, utilities and materials as potential beneficiaries of AI-related infrastructure spending and power demand.
• Bonds have regained their portfolio role, offering higher yields, lower duration risk and stronger diversification potential than during the low-rate environment of 2022.

Explore the full outlook for deeper insights into market resilience, election-year dynamics, AI investment trends and portfolio positioning.