In a resilient market, investors are largely sticking with stocks despite rising bond yields and oil prices. A Bank of America survey shows continued optimism about earnings and AI spending, with equities remaining the favored asset class. Institutions like BlackRock and UBS maintain a bullish outlook, anticipating that AI investment will continue to drive growth and profits.
Despite a challenging macroeconomic environment marked by soaring bond yields and elevated oil prices, investors are demonstrating remarkable resilience, largely maintaining their bullish stance on global equities. The 10-year Treasury yield has surged past the significant 5% threshold, exacerbated by geopolitical risks, while crude oil remains stubbornly above $100 a barrel due to supply concerns stemming from the ongoing conflict in Iran. Nevertheless, major stock indices like the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have posted substantial gains year-to-date, reflecting an underlying optimism in the market.
Futures-options traders work on the floor at the New York Stock Exchange's NYSE American (AMEX) in New York City, U.S., Sept. 8, 2026. (Brendan McDermid | Reuters)
Bank of America's latest Global Fund Manager Survey reveals that market participants are not deterred by increased volatility. While extreme bullishness has subsided, investors continue to favor global equities, with a net 49% overweighting the asset class. Expectations for earnings-per-share growth are at their highest since August 2021, and a significant portion of respondents anticipate a global economic 'boom' in the coming year. Conversely, allocations to bonds have reached their lowest point since May 2022.
Major financial institutions like BlackRock and UBS Global Wealth Management remain positive on equities, particularly within the artificial intelligence (AI) sector. Strategists at BlackRock Investment Institute noted that rising yields do not necessarily contradict strong equity performance, especially when driven by robust investment and growth. They maintain their overweight positions in U.S. equities and AI, believing that AI-related investments will continue to fuel growth and profits, even as they consume significant resources.
Experts like Toni Meadows of BRI Wealth Management acknowledge potential fragilities and bottlenecks in the AI investment chain, such as those in data centers and infrastructure. However, he doubts these concerns will derail the overall AI narrative, anticipating periods of reflection and readjustment rather than a prolonged sell-off. Similarly, Mark Haefele, chief investment officer at UBS Global Wealth Management, emphasizes that the key is the continued expansion of AI demand and monetization, rather than a slowdown in development. He advocates for a diversified approach across the AI value chain, including infrastructure, semiconductors, networking, power, and cloud companies, alongside larger software firms poised to benefit from AI adoption.
Despite short-term macroeconomic headwinds, the underlying belief in the growth potential driven by AI and robust corporate earnings continues to underpin investor confidence in the stock market.
