BlackRock upgrades developed-market equities on a strategic basis, arguing that AI-driven earnings momentum increasingly outweighs concerns over inflation, geopolitical fragmentation, and higher rates.
- BlackRock shifts growth exposure toward equities while downgrading high yield to neutral, preferring participation in AI-driven upside rather than fixed coupon income.
- The firm sees AI broadening beyond U.S. mega-cap tech, benefiting sectors tied to semiconductors, power demand, infrastructure, healthcare, and energy.
- Long-duration government bonds remain under pressure as inflation persistence, rising term premia, and geopolitical supply shocks keep yields elevated.
- Emerging markets linked to AI supply chains — particularly Taiwan and South Korea — remain favored alongside commodity-exporting economies.
The report frames markets as increasingly shaped by competing “mega forces”: AI productivity gains on one side, fragmentation and inflationary pressures on the other.
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