The BlackRock Investment Institute has elevated its stance on US equities to overweight.
The firm points to resilient corporate earnings and limited global growth impact from Middle Eastern geopolitical tensions as key drivers for the upgrade. Analysts anticipate strong earnings, especially within the tech sector, contributing to a risk-on sentiment.
BlackRock also highlights potential economic incentives for de-escalation of the U.S.-Iran conflict, suggesting US stocks could outperform even if broader market returns are modest. The institute continues to favor emerging market stocks and thematic opportunities such as defense.
This move reverses a March downgrade to neutral on US equities, which was prompted by market volatility and concerns over interest rates impacting stocks, particularly small caps.
Looking ahead six to twelve months, BlackRock maintains a favorable view on AI infrastructure and equipment providers. They note that "electro tech" components, including batteries and electric motors, are positioned to benefit from increasing electricity demand and supply limitations.